In this video David Frank discusses about Commodity Channel Index indicator. The Commodity Channel Index is an oscillator used in technical analysis to help determin when an Investment has been overbought and oversold. CCI is the ratio between Asset price and Moving averages of asset price along with some normal deviations from the average. This indicator has grown in popularity over the last decade. It used to be used only with Commodities. Now it is used in Forex and Equities and it is a good tool to assist you. You should use it with other indicators to help you.
If the CCI crosses above 100 level and when it starts to curve downwards then it is a signal to sell and that shows bearish divergence. When the CCI crosses below -100 and then curves up that is a signal to buy which shows bullish divergence and oversold.
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How to Trade — Commodity Channel Index
September 15, 2013 at 16:40
by K. Prabhu
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