The Chaikin Volatility indicator measures an asset's volatility by calculating the difference between high and low prices over a specified period. It may identify potential trend reversals and market tops or bottoms. A sudden increase in volatility, as measured by the ChaikinVlt, may signal a potential trend reversal. Additionally, a stable or decreasing ChaikinVlt may suggest a consolidating or less volatile market, respectively.
Components:
ChaikinVlt: The main oscillating line that measures volatility based on the range between high and low prices.
Zero Line: A horizontal line serving as a neutral point. A rising ChaikinVlt above this line indicates increasing volatility, while a declining line below suggests decreasing volatility.
Parameters:
Length: Default set at 10 periods for calculating the high-low range. Adjusting this alters the period over which volatility is measured.
ShiftLength: Default set at 10 periods for shifting the ChaikinVlt line. Changing this value modifies the lag or lead time of the indicator.
Chaikin Volatility Indicator on subgraph
*Please note that these observations are for informational purposes and should not be construed as financial advice.