Re: Moving Average indicators for MT4

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VIDYA

Upgraded vidya that uses Chandes momentum for adapting
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Chande's Variable Index Dynamic Average (VIDYA) Chande's Variable Index Dynamic Average (VIDYA) is similar to the Exponential Moving Average (EMA) but automatically adjusts the smoothing weight based on the volatility of the prices.

VIDYA was developed by Tushar Chande and presented in March, 1992 in "Technical Analysis of Stocks & Commodities" magazine. In the first version, a standard deviation was used as the Volatility Index. In October, 1995 Chande modified VIDYA to use a new Chande Momentum Oscillator (CMO) as the Volatility Index.

Formula VIDYA is calculated by the formula:


Where: F is a smoothing factor calculated by the formula: is a number of periods for Exponential Moving Average (EMA); is the absolute current value of Chande Momentum Oscillator (CMO); is the value of VIDYA in the previous period. Usage Usually not VIDYA itself is used in trading, but its upper and lower borders (bands), that are by N% above and below VIDYA.

Hint: in Marketscope, to plot upper and lower bands of VIDYA, use the Shift indicator. Please read Shifting Indicator in Marketscope.


Trend Identification VIDYA can be used to identify the market trend:

  • When the market price breaks through the upper band of VIDYA, this may indicate the beginning of an uptrend.
  • When the market price breaks through the lower band of VIDYA, this may indicate the beginning of a downtrend.


Buy and Sell Signals VIDYA generates buy and sell signals when the price crosses over and under the bands:

  • When the price crosses over the upper band of VIDYA, this can be interpreted as a signal to buy.
  • When the price crosses under the lower band of VIDYA, this can be interpreted as a signal to sell.

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