CCI, and the constant that makes its numbers look like levels

What it means

The typical price of each bar is compared with its own twenty-bar mean, and the difference is divided by the mean absolute deviation over the same window and by a constant of 0.015.

That constant is Lambert's, chosen so roughly seventy per cent of readings fall between minus 100 and plus 100. The familiar band is therefore a property of the arithmetic, not of markets, and a reading beyond it means only that price is unusually far from its own recent average.

How we detect it

The engine surfaces it only beyond the conventional band AND with price near an important zone — the same gate RSI, the stochastic and the money flow index are under.

A window in which every typical price is identical has no deviation to divide by, and the engine reports no reading rather than returning a number.

When the read carries information

• The window contains real variation, so the deviation is a scale rather than a rounding error.
• Price is at a zone, which is what makes a distance-from-mean reading a statement about something.

When it misleads

• In a trend the reading stays beyond the band for long stretches, exactly as every oscillator does.
• After one outsized bar the mean and the deviation are both distorted for the rest of the window.
• The band invites being read as support and resistance. It is neither; it is a percentile of the indicator's own distribution.

How it reaches you

It comes after zones, proximity and structure, like every other oscillator here.

A reading beyond the band is never presented as a reason to act.