CCI vs Money Flow Index
The commodity channel index measures how far price sits from its own average with no upper limit. The money flow index runs a bounded gains-against-losses calculation weighted by each bar's volume, so its usefulness depends on whether that volume figure is real.
An unbounded distance reading against a bounded volume-weighted one. They differ in two ways at once, which makes the comparison unusually clean once you name both.
What each one is
The commodity channel index measures distance from a moving average, scaled by typical deviation, with no upper or lower limit. The commodity channel index covers it.
The money flow index weights a gains-against-losses calculation by volume, producing a bounded reading from nought to one hundred. The money flow index covers it.
Both are read for extremes and divergence despite measuring different quantities on different scales, which is how the distinction gets lost.
Where they differ
Whether the reading can run out of room. One extends indefinitely in a strong move. The other reaches its cap and stays there, which looks like a conclusion and is not.
Whether volume is in the calculation. Only in the second, which means only one of them can say anything about whether a move had participation behind it.
How much your data quality matters. The distance reading needs only price, which is reliable everywhere. The weighted one needs volume, which on many instruments describes a single venue.
How comparable readings are between markets. The bounded one carries; the unbounded one does not, because its values reflect what that instrument typically does.
Where they agree
Both are computed from the same price series. Whatever volume adds to one, both are still describing the same bars, so they cannot function as independent checks.
Both lag. Every value came from bars that have already closed, and neither can turn before price does.
Both fail in a range. On this site’s shared series direction runs average 2.01 bars with a longest of 11, and short runs cross any threshold repeatedly on either.
And neither supplies a stop. The ninetieth percentile bar range here is 1.101, and the invalidation belongs at structure rather than at an oscillator level.
Which one to use
Run the money flow index when volume is real and participation is your question. On a centrally cleared instrument the weighting is genuine extra information, and nothing price-only can supply it.
Run the commodity channel index when stretch is your question. How far price has travelled from its own average, normalised to that market’s behaviour, is a different and equally valid measurement.
Run the commodity channel index on anything with a partial volume feed. A weighting built from one venue’s flow is worse than no weighting, because it looks authoritative.
And run one, not both. Two readings of the same bars produce a chart that looks thoroughly examined and contains a single observation.
Why data quality decides half of this
Because a partial volume figure produces a confident wrong reading. The weighted tool has no way to know its input covers a fraction of the trading, and its output looks entirely normal either way.
And because the other half is about scale. An unbounded reading needs calibrating to the instrument before any threshold on it means anything at all.
What to settle before running either
Establish whether your volume is total or venue-specific. Compare two providers on the same bar; a material disagreement answers the question immediately.
Record what the unbounded reading actually prints on your instrument. Its conventional levels came from elsewhere and may be crossed several times a week on your market.
Choose one signal definition per tool. Thresholds, turns and divergence are three different rules, and running all three at once means you have three methods and one record.
And recalibrate when conditions change. On this site’s shared series the average true range has a median of 0.5994 and a ninetieth percentile of 0.7954 — as a market moves through that spread, an unbounded reading inflates without your rules having changed.
The original data
Of the 24,971 unique videos in research/search-study-corpus.jsonl, no title compares these two
directly — this pair is constructed from two subjects the corpus covers separately. Separately, the
commodity channel index appears in 448 titles at a median of 9,318 across 344 channels, and the money
flow index in 44 at a median of 3,160 across 36. The counts come from site/corpus_count.py.
448 videos on one at 9,318 and 44 on the other at 3,160. Ten times the coverage and nearly three times the audience per video for the price-only tool — the version that needs a trustworthy volume feed is both less taught and less watched, which fits how often that feed is actually available.
The answer to the question on that chart depends on your instrument. On a cleared market that is a stretched move without participation; on a spot pair the volume figure is one venue’s — and the two charts are indistinguishable.
When it fails
The failure is running the volume-weighted version on a partial feed, and the output gives no hint. It prints a bounded line, crosses thresholds and produces divergences identical in appearance to the ones on a properly fed instrument. Each is weighted by a number describing a slice of the trading. Decisions are then made on what feels like additional evidence, and the additional evidence was one broker’s flow.
The second failure is treating a conventional level as a limit. One scale is open.
A third is running both for confirmation. They read the same bars.
A fourth is carrying an unbounded threshold between markets. It does not transfer.
A fifth is treating a capped reading as exhaustion. It reports one-sided bars.
And a sixth is assuming volume means total volume. On most instruments it does not.
Related
The commodity channel index covers the unbounded distance reading. The money flow index covers the volume-weighted one. And volume analysis covers whether that input can be trusted.
These two differ on both axes at once — one is capped and one is not, one uses volume and one does not — which makes them harder to compare than most pairs and easier to choose between. Decide which question you are asking and the answer falls out.
— Michael Whitman
This page is educational, not financial advice. Test every idea on your own charts before risking money.