What's Choppiness Index Trading Indicator Buy Trading Signal & Sell Trading Signal?

Choppiness Index Buy Signal

How Can I Generate Forex Buy Trading Signal Using Choppiness Index Indicator

Steps on how to generate forex buy signals using Choppiness Index indicator:

This Choppiness Index buy signal tutorial describes and explains how to generate forex buy signals using the Choppiness Index just as is shown below:

How to Generate Forex Buy Trading Signals Using Choppiness Index Indicator

Choppiness Index Sell Trade Signal

How Do I Generate Forex Sell Signal Using Choppiness Index Indicator

Steps on how to generate forex sell trade signals using Choppiness Index indicator:

This Choppiness Index sell trading signal guide describes how to generate forex sell signals using the Choppiness Index just as is shown below:

How to Generate Forex Sell Trade Signals Using Choppiness Index Indicator

Choppiness Index was designed and built to be an easy but practical indicator to help the online traders to determine if the currency prices are trending or consolidating.

This Indicator is similar to ADX which is also designed to evaluate the strength or momentum of a market trend and determine if the market is trending or it is consolidating.

Choppiness Index - Choppiness Index Forex Trading Buy Trading Signal Sell Signal

The Choppiness Index indicator uses a scale of between 0 & 100. It also typically uses upper & lower bands at 61.8 & 38.2 respectively.

This indicator is plotted by first calculating the true range for each period & then adding the values of n-periods.

Second, it calculates the highest value & lowest value over n-periods and calculates their difference.

Third, it divides the sum of the true ranges and calculates the base-10 logarithm of this value.

Finally, it divides this value by base-10 logarithm of n price periods & multiplies the results by 100.

Technical Analysis and How to Generate Signals

Choppiness Index is a directionless indicator meaning it doesn't determine in which direction the market is heading.

Its basic principle is that the more heavier the market is trending over the last number of n-periods the closer to zero Choppiness Index will be and the more heavily the market is consolidating that is heading sideways in a range or chopping manner, over the last n periods the closer to 100 the Choppiness Index will be.

Indicator values of above 61.8 indicate that the market is ranging/ choppy (moving sideways & consolidating).

Higher values occur during/after a strong consolidation phase. Higher values could also be interpreted as a trade signal of a potential upcoming break-out after a significant consolidation has occurred.

Choppiness Index values of below 38.2 indicate that the market is trending.

Lower values occur during/after a strong trending phase. Lower values could also be interpreted as a signal of a potential upcoming consolidation and choppiness after a strong market trend phase has occurred.

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