How it works

• Period: default 14. The indicator computes the ratio of the sum of high–low ranges over the period to the true range across the same period, then scales the result with a logarithmic formula: choppiness = 100 * log10(sum(Range) / TrueRange) / log10(Period)
• Output: a single line labelled "CMI" (orange by default) where:
• • High values = market is choppy/ranging (avoid directional trades or wait for breakout confirmation)
  • Low values = market is trending (look for trend-following opportunities)

Interpretation & typical settings

• Default Period: 14 (tune to 7–28 depending on timeframe and market).
• Common thresholds (suggested, adjustable):
• • Above ~61.8 → highly choppy / range-bound
  • 38.2–61.8 → mixed / consolidation
  • Below ~38.2 → trending market (strong directional movement)
• Timeframes:
• • Use higher timeframes (H1, H4, Daily) for trend confirmation and swing trades.
  • Use lower timeframes (M5–M30) with a reduced Period for scalping setups.
• Markets: works on Forex, gold/silver (XAUUSD/XAGUSD), indices and cryptocurrencies. Performance depends on the instrument’s volatility profile.

How to use in a strategy

• Breakout filter: only take breakout entries when CMI is below your trending threshold (e.g., <38).
• Trend confirmation: combine with a trend indicator (moving averages, Supertrend) and/or momentum indicators (MACD, RSI) — enter trades when both trend/momentum confirm and CMI indicates a trending environment.
• Avoid signal noise: when CMI is above the choppy threshold (e.g., >61), postpone directional trades or tighten stops.
• Volatility pairing: use ATR or Bollinger Bands to size risk and confirm volatility regimes.

Complementary indicators

• ADX (trend strength), ATR (volatility), MACD / RSI (momentum), Supertrend or moving averages (trend direction), Bollinger Bands (range/volatility).

Installation & parameters

• Parameter: Period (default 14).
• Output name: CMI (orange).
• Non-repainting: values are computed on completed bars; use usual risk management and confirmations.

Risk notice This indicator provides informational signals to support decision-making. It is not a standalone trading system. Backtest and validate settings for your instruments and timeframes. Always use proper risk and money management.