| The Choppiness Index (CHOP) is a technical analysis indicator developed by Australian trader E.W. Dreiss that measures the degree of trendiness or choppiness of a financial asset's price action. The Choppiness Index ranges from 0 to 100, with values closer to 100 indicating a strong trend and values closer to 0 indicating a choppy, range-bound market. The indicator can help traders identify whether a market is trending or ranging and can provide insights into when a trend is likely to reverse. Some traders use it to determine when a market will likely transition from a trending to a range-bound phase or vice versa. Others use it to identify potential trading opportunities, such as buying when the indicator is low and selling when it is high. |
