Commodity Channel Index (CCI)

The CCI (Commodity Channel Index) is a popular technical indicator that helps traders assess current market conditions, identify overbought and oversold conditions, and spot potential trend reversals.
Originally developed for commodity market analysis, it is now widely used in stock, forex, and cryptocurrency trading.

How CCI Works

CCI measures the deviation of the current price from its statistical average over a selected period. The result is displayed as values that fluctuate around zero:

• +100 and above → Possible overbought, high probability of a downward correction
• -100 and below → Possible oversold, probability of an uptrend coming

To change the indicator parameters on the Veles platform, click the “Pencil” button in the settings.

Main Trading Signals

• Buy: Crossing the -100 level from bottom to top
• Sell: Crossing the +100 level from top to bottom
• Divergences:
  • If the price makes a new high, but the CCI doesn’t, it’s a bearish signal;
  • if the price makes a new low, but the CCI doesn’t confirm it, it’s a bullish signal.

How to use CCI in trading

1. Determining trend strength
   • Values above +100 → strong uptrend
   • Values below -100 → strong downtrend
2. Finding entry and exit points
   • Open trades when the CCI moves beyond ±100 levels
   • Take profits when the CCI returns to zero
3. Combination with other indicators
   • Works well with RSI, MACD, and Moving Averages to filter out false signals.
4. Analysis on different time frames
   • Low time frames → finding short-term impulses
   • High time frames → identifying global trends

”CCI Levels” Filters on the Veles Platform

Veles provides ready-made filters that generate signals when key levels are crossed:

• Crossing +100 from top to bottom → signal to enter a Short deal or close a Long deal
• Crossing -100 from bottom to top → signal to enter a Long deal or close a Short deal

⚠ An asset can remain outside overbought/oversold levels for a long time, continuing to move in the same direction, so it is recommended to wait for signal confirmation.

Limitations

• CCI can remain above +100 or below -100 for extended periods during strong trends, making reversal signals premature.
• The ±100 threshold is a convention, not a guaranteed reversal point — confirmation from other indicators is advised.
• On low timeframes, CCI generates considerable noise and is prone to false crossings.

Summary

CCI is a versatile oscillator that works both as a trend strength indicator and an overbought/oversold detector. On the Veles platform, the ready-made “CCI Levels” filters provide clean crossover signals — most effective on medium-to-high timeframes and in combination with MACD, RSI, or volume filters.