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Extra indicators

Choppiness Index

Tells you whether the market is trending (low values) or going sideways in a choppy way (high values).

2 min read · Try it on a live chart ↗

The idea in plain words

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.

How it is calculated

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)

How to use it

  • Above 61.8: choppy, avoid trend strategies. Below 38.2: trending.
  • A drop from high values often comes before a breakout.

Drawing conclusions

  • It does not tell you direction.

Example

After two weeks above 60, CHOP falls to 35 as the price breaks out: a trend has started.

Prices in examples are illustrative.

Watch out for

  • Thresholds are rules of thumb.

A little history

Created by the Australian commodity trader E. W. Dreiss.

Educational content only. No indicator or pattern predicts the future, and nothing here is investment advice.