Extra indicators
Choppiness Index
Tells you whether the market is trending (low values) or going sideways in a choppy way (high values).
L’idée en termes simples
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.
Mode de calcul
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)Comment l’utiliser
- Above 61.8: choppy, avoid trend strategies. Below 38.2: trending.
- A drop from high values often comes before a breakout.
Tirer des conclusions
- It does not tell you direction.
Exemple
After two weeks above 60, CHOP falls to 35 as the price breaks out: a trend has started.
Les prix des exemples sont donnés à titre d’illustration.
Points de vigilance
- Thresholds are rules of thumb.
Un peu d’histoire
Created by the Australian commodity trader E. W. Dreiss.
Contenu éducatif uniquement. Aucun indicateur ni aucune figure ne prédit l’avenir, et rien ici ne constitue un conseil en investissement.