Commodity Selection Index - CSI

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DEFINITION of 'Commodity Selection Index - CSI'

A technical momentum indicator that 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.

INVESTOPEDIA EXPLAINS 'Commodity Selection Index - CSI'

Short-term traders know that the key to making money is movement, which is the reason that they mainly focus on the highly volatile assets. This index attempts to lessen the amount of risk taken, and make it easier to trade by incorporating trend characteristics. Some traders will only trade the commodity with the highest CSI value, while others will make transaction signals when they see a sharp increase in this value.

RELATED TERMS
  1. Commodity

    1. A basic good used in commerce that is interchangeable with ...
  2. Volatility

    1. A statistical measure of the dispersion of returns for a given ...
  3. Trend

    The general direction of a market or of the price of an asset. ...
  4. Reversal

    A change in the direction of a price trend. On a price chart, ...
  5. Short Term

    1. In general, holding an asset for short period of time. 2. ...
  6. Momentum

    The rate of acceleration of a security's price or volume. The ...
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