Modified Commodity Channel Index Forex Indicator

The CCI_ indicator for MetaTrader4 is a modified version that of the original “Commodity Channel Index”. The original creator of the indicator is Donald Lambert and he used it to gauge the difference between a currency’s mean price and the average of the mean price over a specified period.

The CCI indicator can be used in determining overbought and oversold forex market conditions, along with the beginning and ending of cycles in the fx market.

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Example Chart

cci-forex-mt4-indicator

The CCI_ indicator is an “oscillator” due to the fluctuations that is seen in its values between “80” and “-80”. The CCI_ indicator has its lines drawn at “80” and “-80” warning signals values.

When the values of the CCI_ indicator exceeds this boundary limits, traders interpret them as strong overbought conditions i.e. a bearish signal when above the “80” level, and if the CCI_ indicator curve falls below the “-80” level, the market is said to be in an oversold condition i.e. a bullish signal is in the making.

When to Possibly Buy:

Buy when the CCI_ indicator crosses below the -80 level and has shown that it is curving upwards.

If there’s a bullish divergence between the CCI_ and the actual price action, depicted by upward move in the CCI as price of the pair continues to dip lower or sideways.

When to Possibly Sell:

Sell when the CCI_ breaks above the 80 and has started to dip downwards.

If there’s a bearish divergence between the CCI and the real price movement, where the CCI_ is in a downward movement while the price of the forex pair is going higher or sideways, it is a signal for a buy.

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Download the “CCI_.ex4” MT4 indicator

MT4 Indicator Characteristics

Currency pairs: Any

Platform: Metatrader 4

Type: chart window indicator

Customization options: Variable (Description1, InpScaleFactor, InpMaPeriod, InpVolatilityPeriod, Description2, InpCCIPeriod), Colors, width & Style.

Time frames: Any

Type: oscillator

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