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CCI Extremesdeviation from the typical price

Evidence: ModerateBeginnerMean reversion · Oscillator

The Commodity Channel Index measures how far the typical price — the average of high, low and close — sits from its own moving average, scaled by mean deviation. Unlike RSI it is unbounded: it can read −400, and sometimes does.

That unboundedness is the point of this page. A ±100 threshold is not a percentile the way an RSI of 5 is; it is a fixed number of mean deviations. In a quiet market it triggers constantly, and in a violent one it barely triggers at all.

The evidence here is for reversion itself, not for this particular measure of it. The ruler below is a way of deciding when price has stretched far enough — it is not what makes it come back.

Category
Mean reversion · Oscillator
Timeframe
H1 primary · H4 for the trend filter
Suitable pairs
EURUSD · AUDUSD · USDCAD · XAUUSD
Session
Signal at the bar close · execute in London or New York
Indicators / tools
CCI(20) · EMA(50) as the trend filter · ATR(14)

Valid setup

MR-07 · CCI EXTREMES — VALID SETUP AUDUSD · H1 · CCI is unbounded — watch how far past −100 it runs before it turns LONG 0.65339 0.65471 0.65603 0.65735 0.65866 0.65998 0.66130 to the mean 1R EMA(50) — long-only above it TARGET = CCI back to zero ENTRY STOP 1 2 3 4 0.65927 0.65834 0.65742 CCI(20) — no upper or lower limit +100 0 −100 −150 depth gate ① Price above the EMA(50) — long-only ② CCI closes below −100 and keeps going ③ Depth gate: it reached −150, so the signal counts ④ CCI closes back above −100 — enter at that close ⑤ Stop 1.2 × ATR below the excursion low ⑥ Out when CCI reaches zero

Exact rules

Entry

  • Trend filter: price above the EMA(50) means long-only.
  • Setup: CCI(20) closes below −100.
  • Trigger: CCI(20) closes back above −100. Enter at that bar's close.
  • Depth gate worth testing: require the excursion to have reached −150 at some point. A shallow dip through −100 is the reading that produces most of the losses.
  • Mirror above +100 for shorts.

Stop loss

  • 1.2 × ATR(14) below the excursion low.
  • If CCI makes a new low after entry, leave. The scaling has broken down and the threshold has stopped meaning anything.
  • Risk 0.5%–1%.

Take profit / exit

  • CCI returning to zero — the typical price meeting its own average.
  • Or a fixed 1.5R, tested as a separate variant.
  • Time exit after eight bars.

Build CCI Extremes

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More from Mean reversion

RSI(2) Extremesthe short-period oscillatorBollinger Band Fadetwo standard deviationsZ-Score Reversionthe distance, stated plainly

Trading carries risk and most retail accounts lose money. Nothing on this page is financial advice or a recommendation to trade. The chart is an illustration of the rules on constructed candles — it is not a record of a trade and not a backtest.