Commodity Channel Index: Typical Price Deviation from Its Average
Summary
The document introduces the Commodity Channel Index (CCI), a technical indicator calculated from high, low, and close prices. It first derives typical price as the average of those three values, then compares typical price with its moving average and scales the difference by a constant times the mean absolute deviation over a selected period. The calculation therefore expresses how far typical price has moved from its recent average relative to its recent dispersion.
The page gives the indicator’s required inputs and a compact formula, but provides no parameter recommendations, trading rules, empirical results, or explanation of how to interpret particular CCI levels. It refers to an external document for further meaning, which is not included here. As a result, this source supports understanding the calculation, but does not establish a standalone trading strategy or show that using CCI produces profitable signals.
Key ideas
- CCI uses high, low, and close prices to derive typical price.
- The indicator compares typical price with its moving average.
- Mean absolute deviation scales the distance between typical price and its average.
- The document gives no trading thresholds or performance evidence.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.