CCI (Commodity Channel Index) Explained

The Commodity Channel Index (CCI) measures how far price has deviated from its statistical average. Despite the name, it works on any market — forex, crypto, and stocks.

How CCI Works

CCI compares the typical price to its moving average, scaled by mean deviation. The result oscillates around zero and is unbounded, though most action stays within ±100 to ±200:

• Above +100: price is unusually high (strong upward momentum or overbought).
• Below −100: price is unusually low (strong downward momentum or oversold).
• Crossing zero: a shift in momentum.

Two Ways to Trade CCI

1. Momentum/breakout. Treat a move above +100 as the start of strength (go long) and below −100 as weakness. This rides momentum rather than fading it.

2. Mean reversion. In ranges, fade extremes — buy when CCI turns up from below −100, sell when it turns down from above +100.

The right approach depends on the regime, which is why an ADX or trend filter pairs well with CCI.

Building It in Setup.Cash

Add the CCI indicator in the builder with its length (default 20), and condition on the ±100 cross or zero-line cross. Or describe it in text-to-strategy.

Tuning

• Length 20: standard.
• Shorter: more reactive, more signals.
• Longer: smoother, fewer signals.
• Wider thresholds (±150/±200): only extreme moves trigger.

Build a Custom CCI

In the Indicators Lab you can build a CCI-style deviation oscillator with sma and a deviation calculation, or generate one with AI.

CCI is a flexible momentum and deviation tool that can be used to ride strength or fade extremes. Decide which regime you are trading, confirm with a filter, and backtest before going live.