Commodity Channel Index (CCI)

CCI indicator for NT8

The CCI indicator supplied with NinjaTrader cannot be used with an input series other than price. We have recoded it so that you may apply it to other indicators. To do so, simply select any of the other NinjaTrader indicators as input series.

Indicator Description

The CCI indicator ( Commodity Channel Index ) was developed by Donald Lambert and is designed to identify cyclical turns in the commodities markets. The idea is that commodities move in cycles, i.e. intervals of high-to-high or low-to-low.

Lambert recommends using a calculation period of 1/3 of the cycle. If a commodity cycle is 60 days, the calculation period is 20 days. You may identify setups when the indicator approach the +100 or -100 regions.

If the CCI indicator moves above +100, it signals that a new uptrend is beginning. Once the Commodity Channel Index falls below +100, the position should then be closed. If the values moves below -100, a new downtrend is beginning. If they rise above -100, the position should be closed. Of course, you should use additional technical indicators to confirm.

Also, if you see new highs or lows that diverge from the CCI indicator, it could signal a price reversal. Such divergences often signal strong buy or sell signals.

The Commodity Channel Index vs. the RSI

Both the CCI indicator and RSI are momentum oscillators and that can signal bullish and bearish divergences. As mentioned above, if you see that new highs and lows are not accompanied by corresponding momentum levels, it may signal possible trend reversals.

However, the RSI is generally used to detect overbought vs. oversold, whereas the CCI tracks the normal deviation from an instrument’s average price, using that as a basis locate divergences from the normal trend cycles.

Also, a classic RSI compares the average of up-closes versus the average of down-closes over a 14 bar lookback period. The readings oscillate between 0 and 100, with overbought values above 70, oversold below 30 and a midpoint level of 50. For additional information, please review our RSI indicator from our library, that has an improved output, compared to the standard NinjaTrader version.

The CCI indicator is available for NinjaTrader 8.