The Commodity Channel Index measures an asset's deviation from its statistical mean price, oscillating around a zero line with no fixed upper or lower bound. Originally designed for commodities by Donald Lambert, CCI is effective across all markets. Readings above +100 indicate strong bullish momentum (potential overbought), while readings below -100 signal strong bearish momentum (potential oversold).
Oscillates around zero with +100 and -100 as key thresholds. CCI above +100: strong bullish momentum / overbought. CCI below -100: strong bearish momentum / oversold. Zero-line crossovers signal directional shifts. Divergences between CCI and price signal potential reversals. Default period is 20.
Enter long when CCI crosses above +100 from below, signalling the start of a strong bullish move. Buy on a CCI pullback to the zero line during a sustained uptrend (zero-line bounce). Go short when CCI crosses below -100 from above, confirming bearish momentum. Look for bullish divergence when CCI makes a higher low while price makes a lower low near support.
Exit longs when CCI drops back below +100 after reaching extreme readings above +200. Close shorts when CCI rises back above -100 after reaching extreme lows. Take profits at CCI divergences — CCI weakening while price continues in the trend direction. Trail stops while CCI remains above the zero line for long positions.
15M, 1H, 4H, Daily
CCI's unbounded nature means extreme readings (+200, +300) can persist during strong trends — do not blindly fade CCI extremes in trending markets. Use the zero-line bounce as a high-probability continuation trade during established trends. For mean reversion, combine CCI with Bollinger Bands: CCI at -200 with price touching the lower Bollinger Band provides strong convergence.
The Parabolic Stop and Reverse (SAR) is a trend-following indicator that plots dots above or below price to define the current trend direction and provide trailing stop levels. Developed by J. Welles Wilder, the indicator accelerates toward price as the trend matures, eventually crossing price to signal a reversal. The parabolic curve of the dots gives the indicator its name.
Average True Range measures market volatility by calculating the average range of price movement over a specified period, accounting for gaps. Developed by J. Welles Wilder, ATR does not indicate direction — it quantifies how much an asset typically moves, making it essential for position sizing, stop-loss placement, and volatility-based trade management. Rising ATR indicates increasing volatility; falling ATR signals contracting volatility.
The Vortex Indicator consists of two oscillating lines — VI+ (positive trend movement) and VI- (negative trend movement) — that capture the directional movement of price through the relationship between the current high and prior low, and the current low and prior high. Crossovers between these lines signal trend changes and provide entry and exit timing for trend-following strategies across any market.
Williams %R is a momentum oscillator developed by Larry Williams that measures the current closing price relative to the highest high over a specified lookback period. It ranges from 0 to -100, with readings above -20 indicating overbought conditions and readings below -80 indicating oversold conditions. Williams %R is closely related to the Stochastic oscillator but inverted, making it particularly responsive to price reversals.