Commodit Selection Index as an indicator is an extension of DMI. This indicator can help traders to properly select instruments for investment. The selection is based on DMI indicator with considering of capital, leverage, and comission fee.
A high CSI rating indicates that the commodity has strong trending and volatility characteristics.
The trending characteristics are brought out by the Directional Movement factor in the calculation–the volatility characteristic by the Average True Range factor.
Wilder’s approach is to trade commodities with high CSI values (relative to other commodities).
Because these commodities are highly volatile, they have the potential to make the “most money in the shortest period of time.”
High CSI values imply trending characteristics, which makes it easier to trade the security.
The CSI is designed for short-term traders who can handle the risks associated with highly volatile markets.
