Description

• Developed by J. Welles Wilder, Commodity Selection Index helps to identify stock with good volatility suitable for taking trading decisions
• A high CSI value is desired by traders as it indicates that stock is in trend and having high volatility to make easy trades
• It is build multiplying ADXR ((Average Directional Movement Rating) and the ATR (Average True Range) with constants that move value, commission and margin

Interpretation

• High CSI indicates that stock has higher possibility of giving movement for long or short trade based on signal
• Low CSI value or CSI value trading in narrow range signals that stock is ready to give a reversal with a trending movement

Default Parameters Used/Inputs

• High Line
• Low Line
• Close Line
• Bars
• Margin
• Commission
• Move Value

Returns/Output

CSI value of the stock

Formula

K = 100 * (movevalue/sqrt(mrgin)) / (150=commission)
CSI = K * ADXR * ATR