Commodity Selection Index (CSI)

The Commodity Selection Index (CSI) is a technical momentum indicator designed for trading commodities.  The CSI identifies which commodities are the most volatile and therefore offer the best opportunity for profits.

Commodity Selection Index (CSI)

The Commodity Selection Index (CSI) is a technical momentum indicator designed for trading commodities.  The CSI attempts to identify which commodities are the most volatile and therefore offer the best opportunity for short-term profits.  The larger the CSI value, the stronger the trend is and volatility characteristics associated with the commodity. The Commodity Selection Index should only be used by experienced traders who can handle high volatility.


Commodity Selection Index Calculation

The Commodity Selection Index uses components of the Directional Movement Index (DMI) .   Welles Wilder's book New Concepts in Technical Trading Systems contains detailed information on the calculation of the CSI.

Interpretation of Commodity Selection Index

Wilder's approach is to focus on commodities (or securities) with a high Commodity Selection Index relative to other commodities.  These commodities potentially make the most money in the shortest period of time due to high volatility.  High CSI values sldo imply trending characteristics which make it easier to trade the security. 

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