CCI Trading Strategies: Commodity Channel Index Guide
CCI measures how far price has deviated from its mean. Learn to trade +100/-100 levels, zero crosses, and divergences for high-probability setups.
- CCI > +100 = overbought (above mean). CCI < -100 = oversold (below mean). In trends, can stay extreme.
- Zero line cross = trend filter. Divergence at extremes = reversal warning.
- Thrive displays CCI with overbought/oversold and divergence alerts.
Explore CCI Signals
Click through CCI signal types:
CCI above +100 = price well above average. Can indicate trend strength OR overbought. In trends, CCI can stay above +100. In ranges, look for reversal.
CCI Level
CCI above +100
CCI > +100 in range = look for short at resistance. In uptrend = strength, not automatic short. Wait for CCI to drop below +100 for reversal signal.
What Is CCI?
CCI measures how far price has moved from its average. It shows price deviation in terms of mean absolute deviation. +100 means price is one deviation above mean. -100 means one deviation below.
Unlike RSI which is bounded 0-100, CCI can go well beyond +/-100. Extreme readings (+/-200 or more) show exceptional deviation from mean.
CCI Signals
Overbought (+100)
CCI above +100 = price well above mean. In ranges, look for reversal when CCI drops below +100. In trends, sustained +100 confirms strength.
Oversold (-100)
CCI below -100 = price well below mean. In ranges, look for bounce when CCI rises above -100. In trends, sustained -100 confirms weakness.
Zero Cross
CCI crossing zero = price crossing its mean. Simple trend filter. CCI > 0 = bullish bias. CCI < 0 = bearish bias.
| CCI Level | Meaning | Range Market | Trend Market |
|---|---|---|---|
| > +100 | Above mean | Look to sell | Confirms strength |
| < -100 | Below mean | Look to buy | Confirms weakness |
| > 0 | Above average | Bullish bias | Bullish bias |
| < 0 | Below average | Bearish bias | Bearish bias |
CCI Divergence
Divergence shows momentum failing.
- Bullish: Price new low, CCI higher low. Selling momentum weakening.
- Bearish: Price new high, CCI lower high. Buying momentum weakening.
Divergence at extremes (+/-100) is more significant. Wait for CCI to confirm before trading.
Common Mistakes
- Fading trends: CCI can stay overbought/oversold in trends. Don't automatically fade.
- Ignoring context: +100 in range = sell. +100 in uptrend = strength. Context matters.
- Fixed levels: Crypto often exceeds +/-200. Adjust for volatility.
- CCI alone: Combine with price action. CCI confirms, doesn't predict.
Frequently Asked Questions
What is CCI (Commodity Channel Index)?
Momentum oscillator measuring price deviation from its statistical mean. CCI shows how far price has moved from average. Created by Donald Lambert. Works on any asset, not just commodities.
How is CCI calculated?
CCI = (Typical Price - SMA) / (0.015 × Mean Deviation). Typical price = (H+L+C)/3. Result shows how many standard deviations price is from mean.
What are CCI overbought/oversold levels?
+100 = price one deviation above mean (overbought). -100 = one deviation below (oversold). But in trends, CCI can stay above/below these levels for extended periods.
How do I trade CCI signals?
In ranges: CCI > +100 then drops below = sell. CCI < -100 then rises above = buy. In trends: stay with direction while CCI extreme. Zero cross = trend filter.
What is CCI divergence?
Price vs CCI disagreement. Price new high + CCI lower high = bearish divergence. Price new low + CCI higher low = bullish. Warns of momentum failure.
What is the CCI zero line?
Zero = price at its mean. CCI > 0 = above average (bullish). CCI < 0 = below average (bearish). Use as simple trend filter.
What CCI period should I use?
20 periods is standard. Shorter periods more sensitive. Longer smoother. Lambert recommended 20, but test for your timeframe and asset.
Does CCI work for crypto?
Yes. CCI works on any price data. Crypto's volatility means more extreme readings. Adjust expectations—crypto CCI can go well beyond +/-200.