aryasatya

convergence and divergence

Short
FX:EURJPY   Euro / Japanese Yen
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For this example, I will use the Commodity Channel Index ( CCI ) for the study. The definition of the CCI is that it is a measure of market or price strength. It gives us signs of Overbought and Oversold conditions in price action.The default settings are usually 14 or 20 periods (depending on your charting platform and personal choice) and obviously, this can be adjusted like any other technical indicator. I like to interpret the CCI as a speedometer of the market, making it an ideal measure of momentum in prices. And perfect for my convergence and divergence analysis.

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