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Technical Indicators

Thu, Jun 5th, 2025
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The descriptions, formulas, and parameters shown below apply to both Interactive Charts and Snapshot Charts, unless noted. Please note that some of the parameters may be slightly different between the two versions of charts.
Studies noted with * are available only in Snapshot Charts and those noted with ^ are available only in Interactive Charts.
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Choppiness Index

Indicator Type: Standalone - Interactive Charts Only

The Choppiness Index (CHOP) is an indicator designed to determine if the market is choppy (trading sideways) or not choppy (trading within a trend in either direction). The Choppiness Index is an example of an indicator that is not directional at all. CHOP is not meant to predict future market direction, it is a metric to be used to for defining the market's trendiness only. A basic understanding of the indicator would be; higher values equal more choppiness, while lower values indicate directional trending.

  • As a range-bound oscillator, The Choppiness Index has values that always fall within a certain range. CHOP produces values that operate between 0 and 100.
  • The closer the value is to 100, the higher the choppiness (sideways movement) levels.
  • The closer the value is to 0, the stronger the market is trending (directional movement)
  • Often times, technical analysts will use a threshold on the higher end to indicate the market moving into choppiness territory. Likewise there will be a threshold in the lower zone to indicate trending territory. Common threshold values are popular Fibonacci Retracements. 61.8 for the high threshold and 38.2 for the lower threshold.

The Choppiness Index is an interesting metric which can be useful in identifying ranges or trends. What analysts need to be wary of, is identifying when a range or trend is likely to continue and when it is likely to reverse. The best way to accomplish this would be by combining CHOP with additional charting tools and analysis. For example, using CHOP in conjunction with trend lines and traditional pattern recognition.

Choppiness Index

Calculation

100 * LOG10( SUM(ATR(1), n) / ( MaxHi(n) - MinLo(n) ) ) / LOG10(n)

n = User defined period length.
LOG10(n) = base-10 LOG of n
ATR(1) = Average True Range (Period of 1)
SUM(ATR(1), n) = Sum of the Average True Range over past n bars MaxHi(n) = The highest high over past n bars

  1. Sum True Range for the past n periods.
  2. Divide by the result of the following two steps:
  3. Calculate the lowest TrueLow for n periods.
  4. Subtract from the highest TrueHigh for n periods.
  5. Calculate Log10 of the result then Multiply by 100.
  6. Divide the result by Log10 of n.

Parameters

  • Period (14) - the number of bars, or interval, used in the period length
  • Offset (0) - changing this number will move the CHOP either Forwards or Backwards relative to the current market. 0 is the default.
  • Lower Level (38.2)
  • Middle Level (50)
  • Upper Level (61.8)
  • From 38.2 to 61.8

(Source: TradingView)

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