24 basic indicators (6)-CCI

Homeopathic indicator-CCI

CCI indicators are also called homeopathic indicators. They are all called "commodity channel Index" in English and are made by US stock market analyst Donald? What Donald Lambert created is a stock market analysis tool that focuses on stock price deviation.

Section 1 principle and Calculation Method of CCI indicators

I. Principle of CCI indicators

The CCI metric is Donald? Lanbert proposed in the 1980s s as a novel technical indicator. It was first used for the determination of the futures market and then used for the analysis and determination of the stock market, and is widely used. Different from the various technical analysis indicators invented by a majority of companies using the stock's closing price, opening price, maximum price, or lowest price, the CCI index is based on the statistical principle, the introduction of the concept of deviation between the price and the average stock price range during a fixed period emphasizes the importance of the average absolute deviation of the stock price in the stock market technical analysis. It is a unique technical analysis indicator.
The CCI index is used to determine whether the stock price exceeds the normal distribution range. It is a type of overbought and oversold indicators, but it is unique to other overbought and oversold indicators. For example, kdj, wr %, CCI, and other superbuy and oversold indicators all have the upper and lower limits of "0--100". Therefore, they are applicable to the analysis and determination of general normal quotations, however, when the prices of stocks that have soared or plunged in the short term, indicators may become inactive. However, the CCI index fluctuates between positive infinity and negative infinity, so there will be no indicator passivation. This will help investors better judge the market, especially the abnormal markets that have experienced sudden increases and decreases in the short term.

Ii. Calculation of CCI indicators

Similar to other technical analysis indicators, because the selected computing cycle is different, homeopathic indicators include daily CCI indicators, weekly CCI indicators, annual CCI indicators, and minute CCI indicators. The daily CCI and weekly CCI indicators are often used for stock market research. Although their values are different during calculation, the basic method is the same.
Take the daily CCI calculation as an example. There are two calculation methods.
The first calculation process is as follows:
CCI (n) = (TP-MA) limit MD limit 0. 015
Among them, TP = (highest price + Lowest Price + closing price) limit 3
MA = sum of the closing prices of the last n days minus n
MD = cumulative sum of the last n days (MA-closing price) limit n
0.015 is the calculation coefficient, and N is the calculation cycle.

The second calculation method is expressed as the difference between the moving average within n days of the medium price and the medium price divided by the average absolute deviation of the medium price within n days.
The medium price equals the sum of the highest price, lowest price, and closing price divided by 3
Mean absolute deviation is a statistical function
From the above calculation process, we can see that the calculation of CCI indicators is more complex than other technical analysis indicators. Due to the popularity of the stock market technical analysis software, investors do not need to calculate the CCI value, mainly by understanding the calculation method of the CCI index, use it more skillfully to determine the stock market.

Section 2 General Criteria for Determining CCI indicators

CCI indicators have unique functions for analyzing and determining abnormal market trends. Its general analysis methods mainly focus on the division of CCI intervals and the judgment of CCI intervals.

I. Division of CCI indicator intervals

In most stock market analysis software represented by Qianlong software, the analysis interval of CCI indicators is concentrated between-100 and-100, while analysts represent the stock market software, the analysis interval of the CCI indicator is expanded to-200-200. To make it easier for investors to understand, in the following chapter, we still use the-100 -- limit 100 as the analysis interval of the CCI index.
1. According to the market standard, the operation interval of the CCI indicators can be divided into three categories: greater than or equal to 100, less than-100, and greater than 100 ---100.
2. When the CCI> limit 100, it indicates that the stock price has entered the unusual range-the overbought range, and the stock price change should be paid more attention.
3. When CCI <-100, it indicates that the stock price has entered another non-normal range-The oversold range, and investors can absorb the stock at an bargain.
4. When the CCI value is between limit 100 and-100, it indicates that the stock price is in a narrow interval-the normal interval. Investors should focus on wait-and-see.

Ii. Judgment of the CCI metric range

1. When the CCI indicator breaks through the limit 100 line from the bottom up and enters the abnormal range, it indicates that the stock price is out of the normal state and enters the Abnormal Fluctuation stage, and the middle and short-term should be bought in time, if there is a large transaction volume, the purchase signal is more reliable.
2. When the CCI index breaks through the-100 line from top to bottom and enters another unusual range, it indicates that the consolidation phase of the stock price has ended and it will enter a relatively long bottoming process, investors should focus on currency holding.
3. When the CCI indicator breaks through the limit 100 line from top to bottom and enters the normal range again, it indicates that the rising phase of the stock price may end and will enter a relatively long consolidation phase. Investors should sell their shares on an increase in time.
4. When the CCI indicator breaks through the-100 line from the bottom up and enters the normal range again, it indicates that the bottom-up phase of the stock price may end and it will enter a consolidation phase. Investors can buy a small amount of shares at a low price.
5. When the CCI indicators run in the normal range of the 100-100 line, investors can use kdj, CCI, and other superbuy and superselling indicators for research and determination.

Section 3 special analysis and determination methods of CCI indicators

The special analysis and determination methods of CCI indicators mainly focus on the divergence of CCI indicators, the shape of the CCI curve, the trend of the CCI curve, and the parameter modification of the CCI indicators.

I. Divergence of CCI indicators

The deviation between the CCI indicator is that the trend of the CCI indicator is exactly the opposite of that of the price chart. The divergence of CCI indicators is divided into two types: Top deviation and bottom deviation.

1. Top Deviation

When the CCI curve is at a high position far from the limit 100 line, but it hits a recent new high, the CCI curve forms a trend of one peak to one peak, at this time, the share price on the K-line chart hits a new high, forming a one-to-one high trend, which is the top deviation. The top deviation is generally a signal that the stock price is about to reverse at a high position, indicating that the stock price is about to fall in the short term, which is a sell signal.
In the actual trend, the top deviation of the CCI indicator means that when the stock price rises, it first creates a high point, and the CCI indicator also creates a new high point above the 100-line limit. Afterwards, the stock price has been adjusted to a certain extent, and the CCI curve has also changed as the stock price falls. However, if the stock price goes up again and goes beyond the previous high point to create a new high point, and the CCI curve also goes up as the stock price rises, but it starts to fall back without hitting the previous high point, this forms the top deviation of the CCI indicator. After the top deviation of the CCI index, the stock price is likely to fall back to the top, which is a strong selling signal.

2. Bottom Deviation

The base deviation of CCI usually occurs in the low-level area below-100. When the share price on the K-line chart drops all the way, forming a trend of a relatively low price, while the CCI curve is at a low level, but it is the first to stop falling and stabilize, and form a trend of a base-to-bottom height, which is the divergence of the bottom. Bottom deviation generally indicates that the stock price may rebound in the short term, which is a signal of short-term purchases.
Similar to the deviation between metrics such as macd and kdj, the accuracy of top deviation is higher than that of bottom deviation in CCI deviation. When the stock price is at a high position and CCI is at the top of the 100 line above the limit, it can be considered that the stock price is about to reverse downward, and investors can sell the stock in time; while the stock price is at a low position, CCI is also far away from low-level areas below-100 line when there is a baseline deviation, it usually has to appear several times before confirmation, and investors can only do strategic warehouse building or short-term investment.

Ii. Shape of the CCI Curve

The various forms of the CCI curve are also an analysis method to determine the market trend and determine the buying and selling time.

1. When the CCI curve is far away from the high position of the 100 online side, if the trend of the CCI curve forms a reverse shape such as m head or triple top, it may indicate that the stock price has changed from strong to weak, the stock price is about to drop sharply and should be sold in time. If the stock price curve also appears in the same form, it can be confirmed that the decline can be determined using M-headed or triplicate theory.
2. When the CCI curve is below the low position of the-100 line, if the trend of the CCI curve is reversed at the bottom of the W or triple base, the stock price may change from weak to strong, the stock price is about to rebound upwards, and a small amount of shares can be absorbed in the bargain. If the stock price curve also appears in the same form, the increase can be determined by the W bottom or triple bottom theory.
3. In the CCI curve, the accuracy of m head and triple top shape is greater than W bottom and triple bottom.

Iii. Trend of the CCI Curve

1. When the CCI curve breaks through the limit 100 line and enters an abnormal range, it indicates that the stock price begins to enter a strong state and investors should buy the stock in time.
2. When the CCI curve breaks through the limit 100 line and enters the non-normal range, as long as the CCI curve keeps running upwards, it indicates that the stock price remains strong and investors can continue to hold their shares to rise.
3. When the CCI curve is in an abnormal range above the limit 100 line and starts to turn around and down away from the limit 100 line, it indicates that the stock price is hard to maintain, it is a strong conversion signal of the stock price. If the short-term increase in the early stage is too high, you can confirm it. At this time, investors should sell their shares on an increase in time.
4. When the CCI curve falls all the way away from the limit 100 and above, it indicates that the stock price's strength has ended, investors should also sell their shares at the peak.
5. When the CCI curve breaks down to the-100 line and enters another unusual range, it indicates that the stock price is weak and investors should hold the currency to wait and see.
6. When the CCI curve breaks down to the-100 line and enters another unusual range, as long as the CCI curve runs down all the way, it indicates that the stock price remains weak, and investors can wait and see.
7. When the CCI curve breaks down the-100 line and enters another unusual interval, if the CCI curve starts to turn up after a long period of running in the superselling area, it indicates that the short-term bottom of the stock price is initially found, and investors can build a small number of warehouses. The longer the CCI curve runs in the superselling area, the more you can confirm the short-term bottom.

Iv. Parameter Modification

From the calculation method of the CCI index, we can see that the CCI index is also based on time. The time cycle of the parameter can be day, month, week, year, or minute, based on the length of Stock Market time and the trade-offs between investors, these time periods can theoretically take any length of time. In most mainstream stock market analysis software (such as Qian Long and analysts, most of the changes in various time periods are limited to 1-99, for example, 1 day-99 Day, 1 week-99 Week. There are also some stock market analysis software to extend the parameter settings to the range of 1-99, but this part of the software is relatively small, therefore, the parameter settings of the CCI indicator in this section are limited to 1-99.
According to the actual use of the CCI indicator, the time period parameter selected by most investors is daily, while the use of the daily CCI indicator Parameter, most of them are limited to a few parameters such as day 6 and Day 12. If the stock trend is analyzed based on these short-term parameters, most of the changes in the value of the CCI index are between-100-100, and the fluctuation frequency is too cumbersome. Similar to other technical analysis indicators, it is not easy to use the CCI curve in such a small space to accurately analyze and determine the market trend. Therefore, investors should make full use of various short-term, medium-term, and daily parameters provided by stock market analysis, and combine the stock market theories such as the K-line and average-line to comprehensively judge the stock trend.

Section 4 practical skills of CCI indicators

Compared with other indicators, the structure of CCI indicators is relatively simple, and its analysis and determination is mainly focused on the position and Operation direction of the CCI curve. Next, we will take the-day CCI indicator as an example to reveal the sales and wait-and-see functions of the CCI indicator.

I. Sales Signals

1. When the CCI curve on the 88 th broke through limit 100 (numerical value or line, the same below) and entered an abnormal range, it indicates that the stock price began to rise strongly, this is the purchase signal from the CCI indicator. At this point, investors should promptly buy stocks, especially those stocks whose share prices exceed the medium-and long-term moving average. This buying signal is more accurate. (6-1.
2. When the CCI curve on the 88 th broke through the 100 line from the top down and re-entered the normal interval, it indicates that the rising phase of the stock price may end and will enter a relatively long consolidation phase. Investors should sell their shares on an hourly basis in a timely manner. If the CCI curve continues to decline and falls below-100, it indicates that the share price is about to enter the accelerated decline stage, which is the midline selling signal issued by the CCI indicator. At this time, investors should leave the market in time. See figure (6-2.

Ii. Currency Ownership Signal

1. When the CCI curve exceeded limit 100 (numerical value or line or the same below) on the 88 day and entered the abnormal interval, as long as the CCI curve always runs on the Limit 100 line, this means that the strength of the stock price will not be changed, which is a signal that the share ownership is about to rise from the CCI index. This shareholding signal is more accurate, especially those stocks whose share prices run at the same time above the medium and short-term moving average. At this time, investors should firmly hold their shares to stay up. (6-3.
2. When the CCI curve breaks down to-100 (numerical value or line or the same below) on the 88 th and enters another non-normal interval, as long as the CCI curve is always running below-100, this means that the weakness of the stock price will not be changed, which is a wait-and-see signal sent by the CCI indicator. Especially those stocks whose share prices run below the medium-and long-term average, this kind of coin holding signal is more accurate. At this time, investors should firmly hold on to the coin. (6-4.