The Commodity Channel Index (CCI), a momentum-based oscillator, identifies cyclical trends and reversal points in asset prices. One of the main uses is to potentially gauge overbought and oversold conditions. The crossing of the Zero Line may suggest changes in asset trends. Additionally, a CCI value crossing above 100 or below -100 may indicate overbought or oversold conditions, respectively.
Components:
Commodity Channel Index: The main oscillating line that measures an asset's deviation from its statistical mean.
Overbought Line: A horizontal line set at a default level of 100, indicating overbought conditions.
Oversold Line: A horizontal line set at a default level of -100, indicating oversold conditions.
Zero Line: A central line that serves as a neutral point, often used for trend identification.
Up Signal: An additional plot indicating potential upward movement when the CCI crosses the Oversold Line from below.
Down Signal: An additional plot indicating potential downward movement when the CCI crosses the Overbought Line from above.
Parameters:
Length: Default set at 14 periods for the CCI calculation. Adjusting this parameter influences the sensitivity of the CCI line to price changes.
Overbought: Threshold level set at 100. Changing this value alters the level at which the asset is considered overbought.
Oversold: Threshold level set at -100. Changing this value alters the level at which the asset is considered oversold.
Show Breakout Signals: A toggle feature to enable or disable the display of Up and Down Signals.
Commodity Channel Index (CCI) Indicator on subgraph
*Please note that these observations are for informational purposes and should not be construed as financial advice.