Category: 3. Volatility indicators

The Keltner Channel is a volatility based indicator that indicates whether the market’s trend is likely to continue or it may change direction. The Keltner Channel indicator observes price movements in relation to the band forms by lower and upper moving averages. The direction of the Keltner Channel shows the prevailing market trend but it is…

The Choppiness Index formula Choppiness Index = 100 × Log10 {Sum (True Range, n)} / [{Maximum (True High,n)} – {Minimum (True Low,n)}] / Log10,n The basic principles of the Choppiness Index’s working What does the Choppiness Index indicator tell traders?  As we have discussed in detail that the Choppiness Index is an indicator that tells…

What is the Bollinger Bands indicator? Bollinger Bands is one of the most used technical analysis tools, where three various lines are drawn, with one above and one below the security price line and a middle line that forms the envelop shows its specific period moving average. The lines indicate a volatility range in which a specific…

What is the Donchian Channel? The Donchian Channel indicator is a technical analysis tool that plots those lowest lows and the highest highs on the chart. It calculates those prices by using by default 20 bars of data. However, traders can use shorter or longer Donchian Channels according to their own preference or trading strategy.…

What is the ATR indicator? The Average True Range’s up and down movement according to the price of the asset gives a measure of volatility. The higher ATR value shows greater volatility and lower ATR value means less volatility. The Average True Range indicator tells to place a stop or limit order and time to open or…