Extra indicators
Choppiness Index
Tells you whether the market is trending (low values) or going sideways in a choppy way (high values).
La idea en pocas palabras
If the candles' sizes add up to much more than the overall range, the price has been going back and forth. If they add up to about the range, it went in one direction.
Cómo se calcula
Compares the sum of true ranges over N candles with the overall high–low range, on a 0–100 scale.
CHOP = 100 × log10( Σ ATR(1) over N ÷ (highest high − lowest low) ) ÷ log10(N) (N = 14)Cómo usarlo
- Above 61.8: choppy, avoid trend strategies. Below 38.2: trending.
- A drop from high values often comes before a breakout.
Sacar conclusiones
- It does not tell you direction.
Ejemplo
After two weeks above 60, CHOP falls to 35 as the price breaks out: a trend has started.
Los precios de los ejemplos son ilustrativos.
Ten cuidado con
- Thresholds are rules of thumb.
Un poco de historia
Created by the Australian commodity trader E. W. Dreiss.
Solo contenido educativo. Ningún indicador ni patrón predice el futuro, y nada de lo aquí expuesto es asesoramiento de inversión.