How it is calculated
The typical price is (high + low + close) / 3. CCI is the typical price minus its SMA over the length, divided by 0.015 times the mean absolute deviation of the typical prices from that SMA. It is 0 when the price sits on its average, when the deviation is zero, and for a window of identical prices. As TA-Lib CCI, after Lambert 1980.
Reference: TA-Lib CCI (Lambert 1980)
How to read it
Above 100 price is unusually high against its average, below -100 unusually low. It has no fixed bounds, so values of 200 or more occur in strong moves. Lambert took a rise above 100 as the start of a trend; others read the same levels as overbought and oversold. A zero crossing shows price passing its average.
In a strategy
A breakout entry when CCI rises above 100 and an exit when it falls back below: ctx.ind("cci", length=20) compared with its value a bar earlier.
Inputs
| Input | Type | Default | Range or choices |
|---|---|---|---|
Lengthlength | Whole number | 20 | min 2, max 5000 |
What it draws
| Line | Drawn as |
|---|---|
| CCI | Line |
Guide lines at -100, 100.
Used in
No strategy template reads it yet.