The Commodity Channel Index (CCI) was developed by Donald Lambert. Its formula links the price, its media (MA) and its deviation (D):
CCI=(Price-MA)/(0.015D)
The best way to use this indicator is to look for divergencias between the price and the CCI. Also it clearly shows when a commodity, currency, share... is overbought or oversold.
As its construction is similar to the Bollinger Bands, it is not a good idea to use both at the same time.