Commodity Channel Index (CCI) Technical Analysis and CCI MT5 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 indicator is an oscillator MT5 indicator MT5 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 & How to Generate 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 Trading Signal

If the Commodity Channel Index indicator is over-sold, areas below -100, then there's a pending market correction.

Over-sold levels will remain intact until Commodity Channel Index technical indicator 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 trendline break signal to confirm the buy.

Buy Trade

Sell Forex Signal

If the Commodity Channel Index is over bought, zones above +100, then there is a pending market correction.

Overbought areas will remain intact until CCI indicator 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 trendline break signal to confirm the sell.

Sell Trade

FX Divergence FX Trading

Bullish Forex Trading Divergence Setup

Bullish divergence forms when price is making new lows while the CCI technical indicator is failing to surpass its previous low.

This is a bullish trading signal because the divergence will be followed by an upwards market correction.

Bearish FX Trading Divergence

Bearish Divergence forms when price is making new highs while the CCI indicator is failing to surpass its previous high.

This is a bearish trading signal because the divergence will be followed by a downward market correction.

Technical Analysis in Forex Trading