Trading Techniques | OCT 2005
The Link Between Bollinger Bands & The Commodity Channel Index by N. Harrington
Stocks & Commodities V. 23:10 (32-38): The Link Between Bollinger Bands & The Commodity Channel Index by N. Harrington Bollinger Bands and the commodity channel index (CCI) have been employed independently, in conjunction with other indicators, and with each other. Could standard deviation bands around price action be a generalization of an oscillator plotted below the prices? In my work in technical market analysis (TMA), I never really considered the commodity channel index (CCI) until December 2003, when I attended a conference of Woodie’s CCI Club, highlighted by a talk by CCI creator Donald R. Lambert. Seeing so many people willing to come to a conference just to discuss one indicator got me curious. That curiosity led to my own study of the CCI in December 2003 and early January 2004. During that time, I happened upon an interesting relationship between the CCI and John Bollinger’s work with standard deviation bands, which he coined “Bollinger Bands.” INITIAL RESEARCH When I got home from the conference, I started experimenting with the CCI in the e-mini Standard & Poor’s 500 market. I noticed it looked a lot like Bollinger’s %B indicator, which I sometimes use. I changed a default setting of the %B and it became so close to the CCI that they had to be mathematically equivalent, or very close to it. That intrigued me even more. But before going any further into my research, let’s review the technical foundation of the commodity channel index and Bollinger Bands. LAMBERT’S COMMODITY CHANNEL INDEX Donald Lambert’s article on the CCI was originally published in Commodities magazine (now Futures) in October 1980, and republished with corrections in Technical Analysis of STOCKS & COMMODITIES in its inaugural year of 1982.
by N. Harrington
Technical Analysis of STOCKS & COMMODITIES
The Traders’ Magazine since 1982
has had over 1,226,237 subscribers from 174 different countries.
37,000 Page Traders’ Archive for $89.99
To continue reading, sign-up for trial access to Traders.com and the S&C Archive — 37,000 pages of trading ideas!
After verifying your email address, you will have limited access to the S&C Archive, as well as access to a Digital Edition of S&C, and access to Traders.com Advantage and Working Money for 30 days.
Not a subscriber to Technical Analysis of
STOCKS & COMMODITIES magazine?
Click
here to subscribe, or request
a trial subscription.
Log-in now to view articles from the S&C Archive.
Your Subscriber ID is located at the top of your magazine label, highlighted here in red.
Your last name can be found on the second line, highlighted here in blue.
*If you have a company name on the label, that can also be used. It will appear below your name on the label.
If you do not have a Subscriber ID on your label, you can find it on your statement or renewal form.
For help locating your Subscriber ID number, please call us at 1-800-832-4642 or send an email to Survey@Traders.com. If sending an email, please include your name and mailing address.