Chaikin Volatility Indicator
Description of Chaikin’s Market Volatility Indicator
Chaikin’s volatility indicator is intended for technical analysis, it was developed by the famous American trader-analyst Mark Chaikin.
This indicator estimates market volatility by changing current price extremes.
The basis of the calculation is the difference between the maximums and minimums of the candles for a certain period of the chart in relation to the same previous period.
Note! Like all other volatility indicators, the Chaikin indicator is not intended for trading only on it. It can serve only as an addition to the signals of trading systems built on other indicators.
Adding Chaikin Volatility Indicator to MT
Chaikin’s volatility indicator is not included in the standard equipment of MT4 and MT5 trading platforms. In order to add it, you need to copy the indicator files to the appropriate directory on your computer.
If you have MetaTrader 4. Open C: \ Program Files . Next, find the folder for the files of the trading terminal and open it. Go to the directory … \ MQL4 \ Indicators and copy the file / files Chaikin’s Volatility, CHV (Chaikin Volatility Indicator) there.
If you have a MetaTrader 5. Open C: \ Program Files . Next, find the folder for the files of the trading terminal and open it. Go to the directory … \ MQL5 \ Indicators \ Examples and copy the file / files of Chaikin’s Volatility, CHV (Chaikin Volatility Indicator) there.
After that, launch the trading terminal. Click Insert / Indicators / Custom . A list of indicators opens.
Select Chaikin’s Volatility Indicator (CHV).
Option to add indicator CHV No. 2
Add files as above. Then launch MT. By default, the Navigator window is open on the desktop. Select the Chaikin’s Volatility indicator (CHV) in it, as shown in the figure, and drag it onto the chart of the trading instrument.
Volatility Indicator Parameters:
1. SmoothPeriod – parameter smoothing the line of the MA indicator, the default is 10.
2. ROCPeriod – the number of candles whose extremes will be taken into account in the calculation of the indicator, by default 10, that is, we will take a candle that was ten candles back.
3. TypeSmooth is a smoothing method. The default is 1, which means exponential. If you change to 0, then Simple will be used, that is, a simple method.
It is not recommended to change the settings until you understand the nature of the indicator, fully understand how it works. Otherwise, there is a risk of making fundamental mistakes in the trading system in which Chaikin’s Volatility Indicator (CHV) will be used.
Calculation of the value of the volatility indicator:
We calculate the difference in extrema: HL (i) = High (i) – Low (i);
We consider: CHV = (MA (HL (i), n) – MA (HL (i-10), n) / MA (ROC (in), n)) * 100;
Chaikin Volatility Indicator Signals:
1. The CHV line is going up – volatility is large (rising);
2. The CHV line goes down – volatility decreases;
3. The CHV line fluctuates in a narrow range – market uncertainty, low volatility.
Volatility Indicator Download Files
To download Chaikin’s volatility indicator for MT4, please follow the link
To download Chaikin’s volatility indicator for MT5, please follow the link
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