--- title: "CCI Indicator: Commodity Channel Index - Get Funded Now" description: "CCI stands for commodity channel index, an oscillator Donald Lambert introduced in 1980. How it is calculated, what +100 and -100 mean, and its limits." url: "https://getfundednow.com/learn/cci-indicator" language: "en" last_modified: "2026-09-22" publisher: "Get Funded Now (getfundednow.com)" translations: es: "https://getfundednow.com/es/learn/cci-indicator" pt-BR: "https://getfundednow.com/pt-br/learn/cci-indicator" fr: "https://getfundednow.com/fr/learn/cci-indicator" it: "https://getfundednow.com/it/learn/cci-indicator" de: "https://getfundednow.com/de/learn/cci-indicator" disclosure: "All trading at Get Funded Now is simulated. 'Funded' means a simulated or virtual account; GFN is not a broker and does not hold client funds." --- Indicators # The CCI: how far price is from its average. CCI stands for commodity channel index, an oscillator introduced by Donald Lambert in 1980. It measures how far the typical price is from its moving average, scaled by the average deviation so most readings fall between +100 and -100. Readings beyond those levels are read as unusually strong moves. Despite the name, it is used on any market. [All trading lessons](https://getfundednow.com/learn) · [Read the trading rules →](https://getfundednow.com/rules) ## How the CCI is calculated Take the typical price, (high + low + close) / 3. Subtract its simple moving average over the chosen period - 20 is a common default - and divide by the mean absolute deviation of the typical price over the same period. Lambert multiplied the deviation by 0.015 so that roughly 70 to 80 percent of readings would fall between +100 and -100. ## How it is read Traders use the same readings in two opposite ways, which is why context matters. **Common CCI readings** | Reading | Trend reading | Reversion reading | | --- | --- | --- | | Above +100 | Strong upward move under way | Stretched; may revert | | Below -100 | Strong downward move under way | Stretched; may revert | | Crossing zero | Price moving above or below its average | - | ## CCI and divergence Like other oscillators, the CCI is used to look for [divergence](https://getfundednow.com/learn/divergence-trading) - price making a new extreme that the indicator does not confirm. The same caution applies: divergence can persist through a strong trend. Step by step ## How to identify it Fix the settings and the reading before using it. 1. Choose the period - 20 is common - and keep it fixed. 2. Decide whether you read extremes as trend strength or as stretched moves. 3. Check whether the market is trending or ranging before applying that reading. 4. Use a separate entry rule and a stop. Worked example ## The concept, walked through ### A CCI reading in a trend, described An illustrative sequence in words, with round numbers standing in for price and the indicator. It is not taken from any real instrument or date. 1. 1. Break Price rallies sharply and the CCI rises from 20 to 150. 2. 2. Trend It stays above +100 for several bars as price keeps rising. 3. 3. Fade The CCI falls back below +100 while price is still near its high. A reversion trader who sold at 150 was early; a trend trader who bought at 100 caught the move. The same reading supported both ideas, and hindsight decided which was right. Common mistakes ## Where traders go wrong ### Treating +100 as overbought by rule In a strong trend the CCI can stay above +100 for a long time. ### Changing the period to fit the chart An indicator tuned to each chart describes the past, not a method. ### Using it alone It restates price; traders pair it with structure and risk rules. Limitations ## What it cannot tell you No chart concept predicts price. These are the limits worth keeping in view. - The CCI is derived from price and lags it. - There is no reliable evidence that CCI readings alone predict direction. In an evaluation ## Using it on a simulated account Oscillator-based entries against a trend tend to fail repeatedly before one works. On a $100,000 account, with a daily loss limit of $3,000 on Instant or $5,000 on 1 Step and 2 Step, limit the number of attempts as well as the risk on each. - [What is the daily loss limit?](https://getfundednow.com/rules/daily-loss-limit) - Trading rule - The ceiling on a day's losses - 3% on Instant and 5% on 1 Step and 2 Step. - [What is maximum drawdown?](https://getfundednow.com/rules/max-drawdown) - Trading rule - The overall floor beneath the account. - [Can I scalp?](https://getfundednow.com/rules/scalping) - Trading rule - Short-term trading is allowed, with a 2 minutes minimum hold. Questions ## Asked about this concept Commodity channel index. It measures how far the typical price is from its moving average, relative to its average deviation. They mark unusually large moves away from the average. Traders read readings beyond them either as trend strength or as stretched moves that may revert. Keep learning ## Related lessons - [ATR Indicator: Average True Range Explained](https://getfundednow.com/learn/atr-indicator) - Indicators and trading styles - The average true range - how it measures volatility, what ATR 14 means, and how traders use it to set stops and size positions. - [Keltner Channel: How It Works](https://getfundednow.com/learn/keltner-channel) - Indicators and trading styles - Bands set a multiple of average true range around a moving average - how the channel is built, how it differs from Bollinger Bands, and its uses. - [VWAP: Volume-Weighted Average Price](https://getfundednow.com/learn/vwap) - Indicators and trading styles - The volume-weighted average price - its formula, why it resets each session, how traders read price above and below it, and why forex volume complicates it. Sources ## What this page relied on 1. [Commodity channel index](https://en.wikipedia.org/wiki/Commodity_channel_index) - Wikipedia. Retrieved 23 September 2026. Lambert's 1980 introduction of the CCI, its formula and the 0.015 scaling factor. Educational content only, not investment advice or a recommendation to trade. Chart concepts describe what price has done; none of them predicts what it will do, and trading any strategy can lose money. Get Funded Now accounts are simulated and trade virtual funds. Last reviewed 22 September 2026. Ready when you are ## Your capital stays yours. The risk is ours. One evaluation fee, no time limits and up to 90% of simulated profits. Pick an account size and your credentials arrive by email within minutes. [Start your challenge →](https://getfundednow.com/challenges) · [Read the rules](https://getfundednow.com/faq) No subscriptions or hidden fees Payouts every 14 days $400,000 max total allocation --- Source: https://getfundednow.com/learn/cci-indicator Facts about Get Funded Now in one file: https://getfundednow.com/llms.txt