# Commodity Channel Index trading indicator (CCI).

Commodity Channel Index trading indicator - indicator speed of price change, developed by Donald Lambert. In spite of word "Commodity" Commodity Channel Index indicator can be used on Forex too. The formula of Commodity Channel Index trading indicator looks as follows:

**Commodity Channel Index = (Median price - Moving average)/(0.015*D)**

here:

Median price = (High + Low + Close)/3

Moving average - n-periods Moving average

D - average deviation absolute difference between Median price and its simple moving average.

Commodity Channel Index indicator calculating looks like define average deviation in statistic. Calculating makes in some steps:

1) Calculate median price

2) Calculate simple moving average

3) From median price subtracted simple moving average

4) Calculate average deviation: it's a sum absolute values of differences, got in step 3.

5) Average deviation values multiplies by 0.015

6) Step 3 result divided by step 5 result

It's expected that most quantity of Commodity Channel Index indicator random values are situated between -100 percents and +100 percents. Another values, which are situated outside of this range considered non-random and gives trade signals.

Rules for working with Commodity Channel Index trading indicator very simply:

1) Buy, if Commodity Channel Index trading indicator more than 100 percents

2) Close buy, if Commodity Channel Index trading indicator fall less than 100 percents

3) Sell, if Commodity Channel Index trading indicator fall less than -100 percents

4) Close sell, if Commodity Channel Index trading indicator rise higher than -100 percents

Aforesaid rules for the cases when Commodity Channel Index get out from 100 percent zone. You can use crosses Commodity Channel Index with its zero line also.