Description

• Developed by Marc Chaikin, It measures volatility by comparing Rate of change in trading of an instrument
• It calculates EMA of trading range and compares current EMA with EMA certain period ago to detect change in volatility
• It helps to identify period high and low volatility, which can be used to predict market tops and bottoms

Interpretation

• ChVlt indicator crossing zero level up shows increase in volatility
• ChVlt indicator crossing zero level down shows decrease in volatility
• Rapid increase in volatility at price low indicates that bottom is approaching
• Decrease in volatility in an uptrend indicates that top is approaching and price is expected to reverse

Default Parameters Used/Inputs

• High Line
• Low Line
• EMA Period
• ROC Period

Returns/Output

Chaikin Volatility of stock based on the specified period

Formula

ChVlt =[{ EMA(High-Low) – EMA(High-Low)-n } / EMA(High-Low)-n) ] * 100