Choppiness Index: how much price wandered versus how far it went over 14 bars, from 0 to 100, with bands at 61.8 and 38.2.
Overview
The Choppiness Index shows whether the market is trending or moving sideways, in its own pane. High values mean choppy price; low values mean a cleaner trend.
Bands sit at 61.8 and 38.2 by default, and the line takes the trending or choppy color near them.
How it works
CHOP = 100 x log10(sum of true range over 14 bars / (highest high - lowest low over 14 bars)) / log10(14).
When price travels far in one direction, the range is large relative to the summed true ranges, so CHOP is low.
How to use it
- Some traders avoid trend-following ideas while CHOP is above 61.8.
- Use readings below 38.2 to see a strong trend in place.
- Watch a drop from high readings as a sign a range may be ending.
- Pair it with a direction tool, since CHOP shows none.
These are ways some traders read it, for learning. They are not trade signals.
Settings
| Setting | Default |
|---|---|
| Settings | |
| LengthNumber of bars used to sum true ranges and to measure the highest high − lowest low range. | 14 |
| Upper BandReadings above this level indicate a choppy, range-bound market. | 61.8 |
| Lower BandReadings below this level indicate a strong trend. | 38.2 |
| Style | |
| CHOP LineColor of the Choppiness Index line. | #787b86 |
| TrendingLine, fill and zone color toward and below the lower band — a trending market. | #089981 |
| ChoppyLine, fill and zone color toward and above the upper band — a choppy, range-bound market. | #f23645 |
| Band FillFill color of the zone between the upper and lower bands. | #787b861a |
Alerts
You can alert on its line crossing a value or the candle close (from the chart's + menu); checked while ZoroCharts is open.
Notes and limits
- Works on any symbol and timeframe; it only needs candle data.
Education only. Not financial advice. Indicators mark what happened on the chart; they do not predict what price will do. Trading futures, forex, crypto and other markets carries a high level of risk and may not be suitable for everyone.