Calculation
The CCI is calculated in the following way:
1. Calculate a 14-bars Simple Moving Average of the Typical Price. The Typical Price is defined as (High+Low+Close)/3.
2. Calculate the Mean Deviation of Typical Price and SMA of TP for the 14-bars.
3. Apply the following formula:
CCI = (Typical Price - SMATP) / (0.015 * Mean Deviation)
Practically, the CCI gives a numerical representation of standard deviation of price from its Simple Moving Average. Smaller CCI values indicate that price is closer to its Moving Average, and bigger CCI values indicate that price is more distant than its Moving Average.http://www.blogger.com/img/blank.gif
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