Variable Index Dynamic Average

Variable Index Dynamic Average Technical Indicator (VIDYA)

VIDYA is an original method of calculating the Exponential Moving Average (EMA) with a dynamically changing period of averaging. It was developed by Tushar Chande.

Chande Momentum Oscillator (CMO)

CMO is used as a measure of market volatility in VIDYA. It calculates the ratio between the sum of positive increments and the sum of negative increments for a certain period.

Setting up VIDYA

VIDYA requires the setup of two parameters: the period of CMO and the period of EMA.

Upper and Lower Bands

In trading systems, the upper and lower borders of VIDYA (Upper band & Lower band) are commonly used. These bands are N% above and below VIDYA.

Interpretation of the Indicator

To receive trade signals, the interpretation of VIDYA in this form is similar to Bollinger Bands®.