Commodity Selection Index (CSI) is a good forex technical indicator often used in forex technical analysis. Commodity Selection Index (CSI) was developed to help select commodities that fit short-term trading.

Commodity Selection Index (CSI) attempts to identify which commodities are the most suitable for short-term trading. The larger the CSI value, the stronger is the trend and volatility characteristics associated with the asset.

This indicator should only be used by traders who can handle large amounts of volatility as it indicates strong trending, but reversals are always possible.

A high CSI rating demonstrates that the commodity has strong volatility characteristics and trending. The Directional Movement factor brings these characteristics in the calculation, the volatility characteristic by the Average True Range factor.

If CSI rating is high it means that the commodity has strong trending and volatility characteristics. The volatility characteristics are brought out by the Average True Range factor, and the trending characteristics are brought out by the Directional Movement factor in the calculation.

Related Articles:

Investopedia:
A technical momentum indicator that attempts to identify which commodities are the most suitable for short-term trading. (full article)

ForexRealm:
As an indicator of momentum, it’s created for short-term traders who can handle the risks connected with rather inconstant markets. (full article)