CCI Indicator in Pine Script v6: Detect Cyclical Price Reversals with Precision
Every trader has faced this frustrating scenario: you enter a trend just as it exhausts itself, or you exit a position right before a powerful reversal completes. The Commodity Channel Index (CCI) was engineered specifically to solve this problem — it quantifies how far price has deviated from its statistical norm, giving you a mathematically grounded signal for when a cycle is overextended and likely to reverse. In this guide, we'll build a fully functional CCI indicator in Pine Script v6 , dissect the math behind it, and wire up actionable overbought/oversold signals — all with verified, compile-ready code. 📐 The Mathematics of CCI Developed by Donald Lambert in 1980, the CCI measures the deviation of the Typical Price from its Simple Moving Average, normalized by the Mean Absolute Deviation (MAD). The formula is: $$\text{Typical Price} = \frac{\text{High} + \text{Low} + \text{Close}}{3}$$ $$\text{CCI} = \frac{\text{TP} - \text...