Homeopathic index, also known as CCI index, was put forward by Donald Lambert, an American stock market analyst, in the 1980s. It is a relatively novel technical index. It was first used to judge the futures market, and later used to judge the stock market, and was widely used. Different from most technical analysis indexes invented only by using the closing price, opening price, highest price or lowest price of a stock, CCI index is a unique technical analysis index, which introduces the concept of the average interval deviation between the price and the stock price in a fixed period according to the statistical principle, and emphasizes the importance of the average absolute deviation of the stock price in the technical analysis of the stock market.

CCI index is a kind of overbought and oversold index, which is specially used to measure whether the stock price is beyond the normal distribution range, but it has its own uniqueness compared with other overbought and oversold indexes. Most overbought and oversold indicators, such as KDJ and WR%, have an upper and lower bound of "0- 100", so they are more suitable for judging the general normal market. However, for the stock price trend that has skyrocketed and plummeted in a short time, the indicators may be passivated. However, CCI index fluctuates between positive infinity and negative infinity, so there will be no passivation of the index, which will help investors to better judge the market, especially those abnormal markets with short-term ups and downs.

Homeopathic CCI also includes many types, such as daily CCI index, weekly CCI index, annual CCI index and minute CCI index. Daily CCI index and weekly CCI index are often used to judge the stock market. Although their values are different when calculating, the basic method is the same.

Taking daily CCI calculation as an example, there are two calculation methods.

The first calculation process is as follows:

CCI(N days) = (TP-MA) ÷ MD ÷ 0.0 15

Where TP= (highest price+lowest price+closing price) ÷3

MA= cumulative sum of closing prices in recent n days ÷N

MD= cumulative sum of absolute values in the last n days (MA- closing price) ÷N

0.0 15 is the calculation coefficient, and n is the calculation period.

The second calculation method is expressed as the difference between the N-day moving average of the middle price and the middle price divided by the average absolute deviation of the N-day middle price.

Where the median price is equal to the sum of the highest price, the lowest price and the closing price divided by 3.

The average absolute deviation is a statistical function.

As can be seen from the above calculation process, the calculation of CCI index is more complicated than other technical analysis indicators. Due to the popularity of technical analysis software in the stock market, investors don't need to calculate CCI value, mainly by understanding the calculation method of CCI index and using it more skillfully to judge the stock market.