Commodity Selection Index (CSI)
Commodity Selection Index
The Commodity Selection Index (CSI) has been initially developed for stock trading, where it was used to find commodities with the highest profit potential for short-term trading.
The CSI indicator was first introduced Welles Wilder in the book called "New Concepts in Technical Trading Systems".
Commodity Selection Index theory
CSI combines 4 factors, which determine the best commodities for trading.
- high in directional movement (DMI indicator value)
How to trade with CSI
Wilder's approach is to trade commodities with high CSI values (relative to other commodities).
Commodity Selection Index formula
CSI calculation example
Although high CSI values imply trending markets characteristics, the indicator is designed for short-term traders who can handle the risks associated with highly volatile markets.
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