What is Choppiness Index?

[Skechers]

Hello,

Does it indicate how choppy (i.e. many reversals between short & long) the prices are?

Many Thanks, Caesar.

[NinjaTrader_Emily]

Hello Caesar,

Thank you for your post.

The description of the Choppiness Index indicator is, "The Choppiness Index is designed to determine if the market is choppy (trading sideways) or not choppy (trading within a trend in either direction)"

https://ninjatrader.com/support/helpGuides/nt8/choppiness_index.htm

If you'd like to view the source code for this indicator to see how it is calculated, you may go to Control Center > New > NinjaScript Editor. Next, expand the Indicators folder on the right-hand side then double-click on Choppiness Index to open up the indicator code.

Please feel free to reach out with any additional questions or concerns.

[Skechers]

Many Thanks Emily,

I was looking for which range of values (I'm assuming the blue line) indicates choppiness? Is it when the indicator is within the green band, or below/above green band.?

It isn't described in the documentation or code.

Caesar.

[NinjaTrader_Emily]

Hello Caesar,

Thank you for your reply.

The upper line is set to 62.8 and the lower line is set to 38.2 by default. The value of the indicator should range between 1-100 and the market would be considered choppy if the value is over the upper line and closer to 100. If the value is below the lower line that typically means the market is trending.

I hope this helps to clarify. Please let us know if we may be of further assistance.

[Skechers]

Many Thanks Emily!