Theory:
Let's dive into the CCI (Commodities Channel Index) indicator, which stands out from the traditional CCI in a couple of key ways:
- It utilizes standard deviations for its calculations, rather than the mean absolute deviation you might be used to.
- It incorporates double smoothed Wilder's EMA for price filtering, which helps to weed out some of those pesky false signals.
To assist in spotting trends, floating levels are integrated into this indicator. You can choose from three different coloring modes:
- Color changes when the price crosses the outer levels
- Color changes on crossing the middle level
- Color changes when there’s a slope change
Usage:
Keep an eye on those color changes; they can serve as solid trading signals!
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