Theory:
The commodity channel index (CCI) is an oscillator originally introduced by Donald Lambert in 1980. It is calculated as:
(price – average) / (0.015 * mean absolute deviation)
This version:
In this version we are adding (changing) the following:
- option to change the mean absolute deviation to:
- standard deviation
- ATR (average true range)
- option to chose to smooth the value of such a “CCI”
- option to change color on zero crosses or on slope direction change
What is the same as in regular CCI (if smoothing is not used):
– the crosses of the zero line will always be exactly the same as in regular CCI (regardless if you use ATR or standard deviation for calculation)
What is different :
– levels are not going to be the same (that will eventually need adjustments if you are used to use levels when using CCI for trading decisions)
– slope of the CCI is not going to be the same
Usage:
You can use the color changes for signals.
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