Pre-Filtering Prices Before Calculating CCI
Summary
The document describes a variation on the Commodity Channel Index (CCI) intended to reduce its rapid, jagged movements. Instead of smoothing the finished CCI series, it filters the input prices first and then calculates CCI from those filtered prices. The indicator offers 18 types of averages for this pre-filtering step, giving users different ways to modify the price input.
The stated rationale is that smoothing CCI directly can remove characteristic peaks, while pre-filtering prices may reduce roughness without losing as much of that shape. The document calls the results surprisingly good but provides no charts, parameter settings, market examples, or performance measurements to support that assessment. It also does not explain how the different averages behave or specify when this variant may be preferable. The method is therefore a technical-indicator design idea, not evidence of a profitable trading strategy.
Key ideas
- The indicator filters prices before calculating CCI rather than smoothing the completed CCI series.
- It is designed to reduce CCI's abrupt fluctuations while retaining its characteristic peaks.
- Users can choose among 18 average types for the price pre-filter.
- The document offers no comparative tests or trading-performance evidence.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.