What is the Commodity Channel Index (CCI)?

December 15, 2022 | monetaeditor

The Commodity Channel Index (CCI) is a technical analysis indicator that traders use to identify potential buying and selling opportunities in the markets. It was developed by Donald Lambert and is typically used to identify overbought and oversold conditions in commodities, stocks, and other financial instruments. The CCI is a versatile indicator that can be used in a variety of trading strategies and can be applied to different time frames and markets.

How is it used by traders?

Traders typically use the CCI to identify potential buying and selling opportunities based on overbought and oversold conditions in the markets. The CCI is displayed as a line on a separate window below the main price chart and is typically plotted with a default period of 20. A reading above 100 is considered overbought and may indicate that the asset is due for a pullback or correction. On the other hand, a reading below -100 is considered oversold and may indicate that the asset is due for a bounce or rally. Traders can also use the CCI to confirm the strength of a trend or to identify potential trend reversals.

How can I add the CCI to a chart in MT4 or MT5?

To add the CCI to a chart in MetaTrader 4 (MT4) or MetaTrader 5 (MT5), follow these steps:

Open the chart for the currency pair, stock, or other instrument that you want to analyze.

Click on the ”Insert” menu at the top of the chart and select ”Indicators” from the drop-down list.

In the ”Indicators” window, scroll down until you find the ”Commodity Channel Index” and then double-click on it to add it to the chart.

The CCI will appear on the chart as a line on a separate window below the main price chart.

You can customize the appearance of the CCI by right-clicking on it and selecting ”Properties” from the context menu. This will open the ”Commodity Channel Index” properties window, where you can change the color, line style, and other settings for the indicator.

Once you have customized the CCI to your liking, click ”OK” to apply the changes and close the properties window. The updated CCI will be displayed on the chart.

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Moneta Markets is a trading name of Moneta Markets (Pty) Ltd, an authorised Financial Service Provider (“FSP”) registered and regulated by the Financial Sector Conduct Authority (“FSCA”) of South Africa under license number 47490 and located at 1 Hood Avenue, Rosebank, Johannesburg, Gauteng 2196, South Africa. Company Registration Number: 2016 / 063801 / 07. Contact Phone Number: +27 (10) 1429139. Operational Office: 31 First Avenue East, Parktown North, Gauteng, Johannesburg, 2193, South Africa.

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Mmonexia Ltd, facilitates payment services to the licensed and regulated entities within the Moneta Markets Organizational structure.

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