Choppiness Index V2 Indicator

Choppiness Index V2 Indicator

Choppiness Index Indicator shows when the market is choppy (ranging) or trending.

The Choppiness Index V2 indicator for MetaTrader 4 is simply a custom trading tool that shows when the market is choppy, trending, or neutral. It’s a technical indicator every forex trader needs to keep a tab on different trend conditions of the market.

The indicator can potentially improve your overall winning rate in the financial trading industry because it would help you to easily identify a choppy market and avoid it. This is plausible because trading in a ranging (choppy) market has been established as one of the reasons many traders lose their money.

How Do You Read a Choppiness Indicator?
The Choppiness Index V2 indicator comes with a dynamic line that oscillates within a confined area as the market price swings between different zones. The line of the indicator changes between lime-green and sandy-brown color, which denotes trending and choppy markets, respectively.

So, a market is said to be choppy when the indicator’s line turns sandy-brown. Conversely, the line would turn lime green once the market begins to trend in a definite direction.

How to Trade With the Choppiness Index V2 Indicator

The above image shows the action of the Choppiness Index V2 indicator on the EURUSD pair. The highlighted sections on the indicator’s tab show the line to be a lime-green and sandy-brown color, which depict a trending and ranging market, respectively.

Furthermore, it is important to state that the indicator does not show the trend direction of the market. It simply tells when the market is ranging or trending, regardless of the trend direction.

Conclusion
The Choppiness Index V2 indicator for MT4 is one of the technical trading tools that can positively spice up your performance in the forex industry. It would serve as a confluence to help you make better trading decisions by telling you the trend conditions of the market. What’s more, it is free to download.