Woodies CCI on Gold

What it shows

Below the candles: a teal 6-candle CCI, a red 14-candle CCI, and teal or red columns that repeat the 14-candle values. A solid zero line sits between dotted marks at 100 and -100.

How Pravex works it out

1. CCI = (close − simple average of the close) ÷ (0.015 × mean absolute deviation from that average). The code uses the close, not the typical price.
2. Work it out twice: over the fast line length and over the main line length.
3. The columns repeat the main line’s values.
4. A histogram bar is teal when the five candles before it all had a main CCI above zero, and red when those five were all below zero.
5. When neither run holds, the bar is red for a value at or above zero and teal for a value below zero.
6. A sum with invented numbers: if the close is 4 above its average and the mean deviation is 2, the CCI is 4 ÷ (0.015 × 2) = about +133.

Settings

Setting	Default	What changing it does
Fast line length	6	Candles in the fast line. A smaller number makes it swing wildly; a larger one calms it. It can be set from 3 to 14.
Main line length	14	Candles in the slower line and the histogram. A larger number smooths them. It can be set from 7 to 20.

How traders read it

Past the 100 mark, price is far above its recent average; past -100, far below it. Ken Wood’s method treats the 14-candle line holding above zero as an up phase and below zero as a down phase.

The histogram colour carries the extra information. When the slow line has stayed on one side of zero for five candles, the bar takes the colour of that side, and a change of colour hints that the phase is turning.

The fast line is for timing inside the phase the slow line shows. A drop of the fast line back through zero while the slow one is still above it reads as a pullback, not a reversal.

When it misleads

In a sideways stretch both lines cross zero over and over, and the histogram flips colour with no follow-through. The CCI has no fixed ceiling, so a reading of 250 is possible and does not mean a turn is near. On gold, the gaps and spikes around news releases throw the fast line far outside 100 for a candle or two.

Questions and answers

Why can the Woodies CCI lengths only go so far?

The code limits the fast line to 3 through 14 candles and the main line to 7 through 20, so the pair keeps the fast-and-steady split the method is built on. Pravex starts at 6 and 14.

What do the histogram colours mean?

Teal means the five candles before had a main CCI above zero. Red means they were below zero. In between, the colour follows the sign of the current value.

Woodies CCI vs the normal CCI: what is the difference?

The normal CCI is a single line. This one draws two CCI lengths and colours the histogram by recent history.

Why does Woodies CCI use the close instead of the typical price?

Our code feeds both lines the close, which keeps them on the same price as the candles you read. A standard CCI averages high, low and close first, so its numbers differ a little.

Related: Chop Zone, Stochastic Momentum Index, Rank Correlation Index, Commodity Channel Index, every indicator.