There's another problem with the formula we've been using for the BradCCI version of CCI, I'm sorry to say. At some point some parentheses were taken out of the divisor.
(((H+L+C)/3)-Mov(C,28,S))/(.015*Std((H+L+C)/3,28))
became:
(((H+L+C)/3)-Mov(C,28,S))/.015*Std((H+L+C)/3,28)
But those parentheses are crucial, and you get a plot not at all like CCI when you take them out. Basically, this formula is a version of CCI:
(((H+L+C)/3)-Mov(C,28,S))/(.015*Std((H+L+C)/3,28))
And you have to leave the parentheses in. BradCCI gets its "Brad" from the second part of the BradCCI formula: Std(((h+l+c)/3),28)
But the first part of BradCCI looks much like an ordinary CCI plot:
(((H+L+C)/3)-Mov(C,28,S))/(.015*Std((H+L+C)/3,28))
Remember, CCI is basically:
(Price - MA)/(.15 * MD)
MA = the moving average over number of days designated
MD = the mean deviation of the price over the number of days designated.
You can't take out those parentheses around .15 * MD. You can't do it in CCI and you can't do it in the first part of BradCCI (well, you can, but you might be audited by the IRS if you do, or viewed with suspicion by neighbors, or have water splashed on you at Dave's Beach). If you want to see what happens when you do, try taking them out of the first part of BradCCI, then plotting it again, with the parentheses back in. You get very different results. If you still don't believe me, go back to all the notes on CCI, through the links at Andy's site. Or look up the formula for CCI in a book such as "Technical Analysis from A to Z."
There's another minor change that's been made in the first part of BradCCI, too, if you want to get really anal retentive about it all.
It should really be:
(((H+L+C)/3)-Mov(C,28,S))/(.015*Std(C,28))
Not: (((H+L+C)/3)-Mov(C,28,S))/(.015*Std((H+L+C)/3,28))
Remember, this is the original formula:
xt (H+L+C)/3
axt average(close,28) uses simple moving average
md stddev(close,28)
Inputs are: xt, axt and md
Plot Name Formula
Plot1 (xt-axt)/.015*md
Plot2 stddev((H+L+C)/3,28)
But changing c to h+l+c in the divisor of the first part of BradCCI doesn't make much difference in the plot, so you can do it either way. |
