Smoothed CCI Using Standard Deviation and Zero-Cross Signals
Summary
This indicator modifies the Commodity Channel Index by using standard deviation in place of the mean absolute deviation used by the conventional CCI. It also applies double-smoothed Wilder exponential averaging before generating signals, with the aim of reducing short-term fluctuation. The stated signal rule is to act when the smoothed indicator crosses zero.
The document explains the calculation differences and says the indicator belongs to a series intended for use with custom calls. Setting the EMA period to one or less makes it resemble a regular CCI, but the standard-deviation calculation means it will not match the built-in version. No chart examples, backtest, or performance evidence are provided, and the text does not specify entry filters, exits, or risk controls. The suggested reduction in noise is a design rationale rather than a result supported by reported testing.
Key ideas
- The indicator substitutes standard deviation for the conventional CCI's mean absolute deviation.
- Double-smoothed Wilder averaging is applied to reduce fluctuations before signals are formed.
- Signals are based on the indicator crossing its zero line.
- A short EMA period makes the calculation resemble CCI but does not reproduce the built-in indicator.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.