Variable Index Dynamic Average
Variable Index Dynamic Average Technical Indicator (VIDYA)
Section titled “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)
Section titled “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
Section titled “Setting up VIDYA”VIDYA requires the setup of two parameters: the period of CMO and the period of EMA.
Upper and Lower Bands
Section titled “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
Section titled “Interpretation of the Indicator”To receive trade signals, the interpretation of VIDYA in this form is similar to Bollinger Bands®.