Choppy Market Index - indicator of market volatility
Each of us is faced with the problem that when there is a trend, all strategies work like clockwork, but when it starts sawtooth movement "up and down", even good, proven forex strategy suffer losses. So how do you determine when it is not necessary to go into the market? This will help us CMI (Choppy Market Index) - an indicator of market volatility.
Choppy Market Index - a simple indicator that calculates the difference between the closing of the last (for now) the bar and closing the N bars ago and then divides that value by the difference between the highest and lowest HIGH LOW of these bars. The resulting number is then multiplied by 100 to give a visual representation of "instability" of the market in the range from 1 to 100.
Daniel FernandezIndicator, as well as a strategy based on it (see below), invented by Daniel Fernandez, the material on trade with CMI was published in the August issue of Currency Trader.
After installing the Choppy Market Index on the chart (any timeframe and currency pair), we obtain a similar picture:
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