DYO: PriceFinder - CCI Bands

Perhaps the most significant enhancement to the Ensign Windows program in 2005 will be the PriceFinder™ technology that can be used with any study.   PriceFinder is a selection in the Design Your Own™ (DYO) study feature.  It is being used on the following chart to indicate the price that would cause the Commodity Channel Index (CCI) study to cross above 133 or below -133.  

The upper green line is the price that would cause CCI to cross above 133.  Shortly after 14:00 on the chart the CCI crossed above the upper green line, and the CCI in the sub-window has moved above the 133 grid line.  

And, every time the price trades below the lower red line, CCI is below the -133 grid line.   The green and red lines create a visual channel that is useful in knowing what price it would take to cause CCI to cross either of these significant grid levels.

The CCI 133 Band lines are created with these Design Your Own study parameters.

The PriceFinder™ needs a Boolean flag to know what condition is to be tested.   Line A is selecting the CCI study condition of being above the 133 grid level.  This Boolean flag is either True or False and is saved in Global Variable [1].   Line B is the powerful PriceFinder which will plot in green the price that will cause the [1] flag to change states.  If the CCI study is below 133, what higher price will cause CCI to cross above 133.  If the CCI study is above 133, PriceFinder will find the price that will cause the CCI study to cross below 133.

Lines C and D are the implementation for plotting the red line which is the price that will cause the CCI study to cross the -133 grid level.   Line C is the test that Line D will find the price which causes the test condition to change states.

The [B] and [D] labels on Line B and Line D cause the PriceFinder prices to show on the chart at the end of the lines.  The CCI study is currently above the -133 grid line, so the red line value of 1205.25 is the price that ES #F would have to go to on the 3 minute bar to cause CCI to cross -133.  As long as ES #F trades above 1205.25, the CCI value will remain above -133.  This is very useful information to be armed with when CCI is used is making trading decisions.

Although the example used 133 and -133 as the levels to test for, any CCI levels could have been the test conditions and PriceFinder would have plotted the appropriate channel bands.  The tool is totally flexible.  Even complex multi-study consensus conditions can be the Boolean flag that PriceFinder is asked to find the answer for.

A template named CCI-133-Bands can be downloaded from the Ensign web site using the Internet Services form.