Variable Index Dynamic Average was developed by Tushar Chande is a moving average using exponential smoothing to automatically adjusts its speed based on market volatility. It’s calculated according to the following formula:
VIDYA(i) = Price(i) * F * ABS(CMO(i)) + VIDYA(i-1) * (1 – F* ABS(CMO(i)))
- ABS(CMO(i)) – current value of 9-period Chande Momentum Oscillatorused to calculate the volatility index;
- VIDYA(i-1) – previous value of VIDYA.
How to trade with VIDYA Indicator
Chande’s VIDYA can be used in forex trading like a standard moving averages.
- File: VIDYA.mq4
- Size: 2 Kb