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New Smooth CCI mod

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By JohnLast 2478 days ago

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Here is a screen shot of a new Smooth CCI mod. I was looking again at the formula of the CCI,           Check this mod too. The CCI smooth is a continuation of the previous release.

 

Here is the formula of CCI:

 

CCI = (Typical Price - 20-period SMA of TP) / (.015 x Mean Deviation) 

In the previous mod I questionned the constant of 0.015. The CCI was created by Lambert. And he had the idea to use a multiplier 0.015, so as a result 70% to 80 % of the price action would remain within -1oo and +100. However we should focus on what his adea was, and you need to change this number to make fit 70% to 80 % of the price action within the levels -100 and 100.

I thing you understand much better this indicator now.

However this time we can go one step further and not use a difference between 

Typical Price - 20-period SMA of TP

but something else:

5-period EMA of TP - 20-period SMA of TP for example. In this way you can get much smoother CCI without adding any complexity to the indicator.

 

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And this indicator allows to build different derivative indicators and possibly to smooth them. Have a look at the daily chart of EUR/USD with Trend magic.

 

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And here you can see the period of 50 with smoothing and without. With smoothing the lag is really small, but we gain much more in smoothness. Bear in mind that this mod uses only the native possibilities of MT4 we are not using any fancy special digital smoothing like for example jurik filters. 

Normally smoothing is achieved by applying smoothing to the outut of the CCI, that is one possibility. However here if I add more smoothing I could explore much more possibilities and not only the smoothed CCI possibility, that can be used for derivative indicators and trading systems like here on this example the Trend magic that is based on the CCI.

 

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 Download from here, only for registered users.