• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Daniels Trading

Independent. Objective. Reliable.

Top Navigation

  • Open a Futures Account
  • Sign Up
  • Log in
  • 1.800.800.3840

Primary Navigation Menu

  • About
    • Who We Are
    • Services
    • Careers
    • Risk Disclosure
    • COVID-19
  • Trade
    • Broker-Assisted
    • Self-Directed / Online
    • Request Pricing
  • Hedge
    • DanielsAg Mobile App
    • Ag Marketing Plan
    • WASDE Analysis
    • Grain Resources
    • Livestock / Dairy Resources
    • Hedging Videos
    • Request Pricing
  • Invest
    • Automated Strategies
    • Managed Futures
    • Request Pricing
  • Advisories
    • GENERAL / FUNDAMENTAL
      • DT Newsletter
      • Insider Market Advisory
      • Turner’s Take Newsletter & Podcast
    • TECHNICAL ANALYSIS
      • The Cullen Outlook
      • Data Feed Trade
      • Jarboe Trading Journal
      • Trade Spotlight
    • AG MARKETING
      • Cattleman’s Advisory
      • The Swine Times
      • Technical Ag Knowledge
      • This Week in Grain
      • Turner’s Take Ag Marketing
    • THIRD-PARTY RESOURCES
      • CFRN
      • Moore Research Center, Inc. (MRCI)
      • OptionWorks®
      • TASMarketProfile.com
  • Education
    • CME Group Resource Center
    • Small Exchange Resources
    • Guides
    • Frequently Asked Questions
    • Order Entry Handbook
    • Webinars
  • Blog
    • Futures 101
    • Ag Marketing
    • Tips & Strategies
    • Trading Advisories
  • Resources
    • Trading Software
    • Quotes and Charts
    • Futures Calendars
    • Contract Specifications
    • Margin Requirements
    • Futures Calculator
  • Accounts
    • GAIN Capital Futures
    • StoneX
  • Contact
Home / Education / Technical Analysis Learning Center / Commodity Channel Index

Commodity Channel Index

Commodity Channel Index is designed to detect beginning and ending market trends. This study measures the distance between the share prices and their Moving Average, and thus allows a measurement for the trend strength and/or intensity.

Download our free guide, Futures Trading: Technical Analysis for Beginners,  today!

Properties

Period: The number of bars in a chart. If the chart displays daily data, then period denotes days; in weekly charts, the period will stand for weeks, and so on. The application uses a default of 20, with 14 being another common setting.

Aspect: The Symbol field on which the study will be calculated. Field is set to “Default”, which, when viewing a chart for a specific symbol, is the same as “Close”.

Interpretation

This index, as suggested by its name, was designed for the futures market but is today also used for shares. According to the developer, Lambert, values of +100 to -100 point to a market with no trends, and thus do not supply any trade studies. Also, according to Lambert, 70% to 80% or all price fluctuations fall within +100 and -100 as measured by the index. Buying and selling signals only occur when the +100 line (buy) and the -100 (sell) are crossed.

The trading rules for the CCI are as follows:

  • Establish a long position when the CCI exceeds +100.
  • Liquidate when the index drops below +100.
  • For a short position, you use the -100 value as your reference point. Any value less than -100, e.g. 125, suggests a short position, while a rise to -85 tells you to liquidate your short position.

Literature

Lambert, Donald R. Commodity Channel Index, Commodities magazine. October, 1980.

Colby, Robert F., Myers, Thomas A. The Encyclopedia of Technical Market Indicators. Dow Jones – Irwin. Homewood, IL. 1988.

Lebeau, Charles, and Lucas, David. Technical Trader’s Guide to Computer Analysis of the Futures Market. Homewood, IL: Business One Irwin, 1991.

Jobman, Darrel R. The Handbook of Technical Analysis. Irwin Professional Publishing. 1995.

Commoditiy Channel Index: Tool for Trading Cyclic Trends. Commodities. October, 1980, pp.40. (now Futures)

Murphy, John J. Technical Analysis of the Futures Markes.

Wilder, J. Welles. New Concepts in Technical Trading Systems. Greensboro, NC: Trend Research, 1978.

Content Source: FutureSource

Read our guide, Futures Trading: Technical Analysis for Beginners

View Other Technical Analysis Studies

  • Bollinger Bands
  • Crack Spread
  • Crush Spread
  • Default
  • Directional Movement Index
  • Envelope
  • Exponential Moving Average
  • Exponential Oscillator
  • High Low Moving Average
  • Highest High / Lowest Low
  • Historic Volatility
  • Keltner Channel
  • Least Squares Linear Regression
  • Line Oscillator
  • Momentum
  • Moving Average
  • Moving Average Convergence Divergence
  • Moving Standard Deviation
  • Open Interest
  • Oscillator
  • Parabolic Stop and Reversal
  • Rate of Change
  • Relative Strength Index
  • Slow Stochastic
  • Smoothed Moving Average
  • Smoothed Oscillator
  • Stochastic
  • Variable Moving Average
  • Volume
  • Volume and Open Interest
  • Weighted Close
  • Williams’ %R

Primary Sidebar

Tips & Strategies

Finance

Don’t Turn Yourself Around

A good plan of action for your trades and investments in times like these could simply be to stay calm. Though exercises such as politics may demand a more passionate approach..

Fundamental Analysis and Position Trading

In the world’s financial markets, fundamental analysis is a go-to methodology for legions of active participants. When coupled with position trading strategies, the two disciplines provide a robust framework for consistent decision-making. Read on to learn how fundamental analysis and position trading can help you achieve your market-oriented objectives. What Is Fundamental Analysis? Fundamental analysis… Read more.

New Year by Tim Mossholder

Make A Resolution That Counts

While taking a loss is never fun, it could be the difference between net profits and losses at the close of 2021. Who knows? Maybe Peloton money will be chump change by 2022.

More Tips & Strategies

  • Steps for Energy Trading and Risk Management
  • Welcome to the Future of Interest Rates
  • Animal Spirits at Stock Market Highs
  • What Will a Contested Election Mean for the Futures Markets?
  • Are Energy Stocks Cool Again?
  • Is It Time to Limit Your Exposure to U.S. Dollar Devaluation?
Trustpilot

Footer

Site Navigation

  • Frequently Asked Questions
  • About Us
  • Customer Reviews
  • Contact Us
  • Futures Blog
  • Open a Futures Trading Account
  • Media Resources
  • Fund Your Account
  • Legal Notices

Contact Us

Daniels Trading
100 South Wacker Drive, Suite 1225
Chicago, IL 60606
+1.312.706.7600 Local / Int'l
+1.800.800.3840 Toll-Free
+1.312.706.7605 Fax

Connect with Us

Trustpilot

Copyright © 2021 · Daniels Trading. All rights reserved.

Risk Disclosure

This material is conveyed as a solicitation for entering into a derivatives transaction.

This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.

Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.

Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.

You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.

  • Risk Disclosure
  • Privacy Policy
  • California Residents Privacy Notice
  • Terms of Use
  • Back to top