The Choppiness Index gauges whether the market is trending or ranging. When the indicator drops below a threshold, it signals the start of a trend from a choppy environment.
This strategy enters in the direction of price relative to its moving average when choppiness falls. It exits if choppiness rises back above a high threshold or a stop-loss hits.
The goal is to catch new trends emerging from consolidation periods.
- Entry Criteria: Choppiness below ChoppinessThreshold with price above/below MA.
- Long/Short: Both directions.
- Exit Criteria: Choppiness above HighChoppinessThreshold or stop.
- Stops: Yes.
- Default Values:
- MAPeriod = 20
- ChoppinessPeriod = 14
- ChoppinessThreshold = 38.2m
- HighChoppinessThreshold = 61.8m
- CandleType = TimeSpan.FromMinutes(5)
- Filters:
- Category: Breakout
- Direction: Both
- Indicators: Choppiness, MA
- Stops: Yes
- Complexity: Intermediate
- Timeframe: Intraday
- Seasonality: No
- Neural Networks: No
- Divergence: No
- Risk Level: Medium