What Is Commodity Channel Index (CCI)?
CCI measures how far price deviates from its statistical mean, helping identify cyclical turns and overextended moves.
Quick Answer
CCI measures how far price deviates from its statistical mean, helping identify cyclical turns and overextended moves.
What Does CCI Measure?
The Commodity Channel Index (CCI) was developed by Donald Lambert in 1980 for commodity markets but is widely used across stocks, forex, and crypto. It compares the typical price to its simple moving average, normalized by mean deviation. Readings above +100 suggest price is well above average (potentially overbought), while readings below -100 suggest price is well below average (potentially oversold). CCI is unbounded, so extreme readings can extend further during strong trends. On VaultCharts desktop charts, CCI appears in a subpane with a configurable lookback period.
CCI = (Typical Price - SMA of TP) / (0.015 × Mean Deviation)How to Read CCI
- 1CCI above +100 indicates price is extended above its average
- 2CCI below -100 indicates price is extended below its average
- 3Zero-line crossovers can confirm trend direction changes
- 4Divergence between CCI and price may signal weakening momentum
How to Use CCI in Trading
CCI Settings
| Setting | Default | Description |
|---|---|---|
| Period | 20 | Number of periods for CCI calculation |
Common Mistakes to Avoid
Use CCI in VaultCharts
VaultCharts includes Commodity Channel Index with customizable settings. Combine it with our automated pattern detection and trade signals for better analysis.