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