Commodity Channel Index (CCI) Technical Analysis and CCI MetaTrader 5 Indicator
Developed by Donald Lambert
The Commodity Channel Index measures the variation of a commodity FX price from its statistical mean(statistical average).
This MT5 forex indicator is an oscillator MetaTrader 5 forex indicator MetaTrader 5 forex indicator which oscillates between high levels and low levels
When the CCI is high it shows that FX price is unusually high when compared to its average.
When the CCI is low it shows that FX price is unusually low compared to its average.
FX Technical Analysis and How to Generate Trading Signals
Overbought/ Oversold Levels
The CCI typically oscillates between ±100.
Indicator values above +100 indicate an overbought conditions and an impending market correction.
Indicator values below -100 indicate an oversold conditions and an impending market correction
Buy FX Trading Signal
If the Commodity Channel Index is oversold, levels below -100, then there is a pending market correction.
The oversold levels will remain intact until CCI starts to move above -100.
When forex price starts moving above -100 then that is interpreted as a buy.
The Commodity Channel buy signal should be combined with a forex trend line break signal to confirm the buy.
Buy Trade
Sell Forex Trading Signal
If the Commodity Channel Index is overbought, levels above +100, then there is a pending market correction.
The overbought levels will remain intact until CCI starts to move below +100.
When forex price starts moving below +100 then that is a interpreted as sell.
This Commodity Channel sell signal should be combined with a forex trend line break signal to confirm the sell.
Sell Trade
FX Divergence FX Trading
Bullish Forex Trading Divergence Setup
Bullish divergence occurs when price is making new lows while the CCI is failing to surpass its previous low.
This is a bullish signal because the divergence will be followed by an upward market correction.
Bearish FX Trading Divergence
Bearish Divergence occurs when price is making new highs while the CCI is failing to surpass its previous high.
This is a bearish signal because the divergence will be followed by a downward market correction.
Technical Analysis in Forex Trading
