DUAL Commodity Channel Index (DCCI)

What Is DUAL Commodity Channel Index?

The dual commodity channel index (DCCI) is a device utilized in technical analysis to distinguish when an asset or market is overbought or oversold. A dual commodity channel index is a variation on the famous commodity channel index, which is an indicator created in 1980 by Donald Lambert to measure the variation in a commodity's value from the statistical mean.

Understanding DUAL Commodity Channel Index (DCCI)

A dual commodity channel index is built by diagramming a smoothed commodity channel index line alongside an unsmoothed commodity channel index line measuring a similar commodity, currency, or financial security. Hybrids of the two lines demonstrate conceivable buy and sell signals, while subsequent breaks in the price trendline show clear entry and exit points.

The dual commodity channel index is a technical analysis instrument known as a oscillator, which is an index in light of the value of a financial asset and developed to sway between two extreme values. As the index arrives at the maximum value, it shows the asset is overbought and due to decline in price. As the index arrives at the base value, it demonstrates the asset is oversold, and due to increase in price.

The commodity channel index is calculated by taking the difference between a financial asset's current price and its simple moving average and afterward separating that by the mean absolute deviation of the price. A dual commodity channel index plots two variations of CCI lines, providing traders with an even more granular comprehension of a financial asset's momentum.

DUAL Commodity Channel Index and Technical Analysis

The dual commodity channel index is a most loved instrument for investors who use technical analysis to make trades. Technical analysis includes the utilization of historical price data to foresee future developments, and it varies from fundamental analysis, which looks at data like an organization's earnings, the state of the economy, political events, and other data outside a security's price to distinguish undervalued or overvalued assets.

Technical analysis works under the assumption that by far most of accessible data about a stock, bond, commodity, or currency is quickly incorporated in the price by market powers, and subsequently it isn't beneficial to pursue investment choices in light of this data. For technical traders, the key to investing achievement is deciphering the mass psychology of the market into indicators which empower them to time their entry or exit from a stock or security.

Features

• Arriving at maximum value demonstrates an asset is overbought. Arriving at least value shows an asset is oversold.
• It depends on the famous commodity channel index.
• The dual commodity channel index is a technical analysis device to recognize when an asset is overbought or oversold.
• The dual commodity channel index is an oscillator, and that means it sways between two extreme values.