Choppiness Index — Volatility Drop
The Choppiness Index tells you *when* the market is trending versus chopping sideways — not which direction. Use it as a regime filter to switch between trend-following and mean-reversion tactics.
## What it does
- Measures how directional price has been over a lookback window using the ratio of summed True Range to the total high-low range.
- Scales the result to a clean 0–100 oscillator via a log normalization.
- High readings (≥ 61.8) flag choppy, range-bound conditions; low readings (≤ 38.2) flag strong trends.
- Color-codes the line (yellow = chop, cyan = trend, gray = neutral) and shows a live regime label.
- Fires alerts the bar the market crosses into a trend or chop regime.
## Recommended settings
- Length: 14
- Chop threshold: 61.8
- Trend threshold: 38.2
- Mid reference: 50
## Ideal timeframe
Works on any timeframe; most reliable as a regime filter on 15m–4h and daily charts.
## How to use
Treat the Choppiness Index as a gate, not a trigger. When the line is low (≤ 38.2) and falling, price is trending — favor breakout and pullback entries and let trend tools lead. When the line is high (≥ 61.8), the market is coiling sideways — fade the edges of the range and distrust breakouts until the index rolls back down. The Fibonacci-derived 61.8 / 38.2 bands are the classic thresholds; the cyan/yellow coloring and background tint make the active regime obvious at a glance.
## thinkScript code
```
# ─────────────────────────────────────────────
# │ MarketFragments.com | DNA & Market │
# │ info@marketfragments.com │
# │ www.marketfragments.com │
# ─────────────────────────────────────────────
# Time →
# │
# █ █ █│ █
# █ █ █ │ █ █
# █ █ █ │ █ █ █ ╭─╮
# █ █ █ │ █ █ █ █ ╭─╯ ╰─╮
# █ █ █ │ █ █ █ █ █ █ ╭─╯ ╰─╮
# █ █ █ │ █ █ █ █ █ █ █ █ ╭─╯ ╰─╮
# █ █ █ │ █ █ █ █ █ █ █ █ █ █╭─╯ ╰─╮
# █ █ █ │ █ █ █ █ █ █ █ █ ╰─╮ ╭─╯
# █ █ █ │ █ █ █ █ █ █ ╰─╮ ╭─╯
# █ █ █ │ █ █ █ █ ╰─╮ ╭─╯
# █ █ █ │ █ █ ╰─╮ ╭─╯
# █ █ █ │ █ ╰─────╯
# ──────┴──────────────────────────────────────────────────────────────
# T1 T2 T3 T4 T5 T6
#
# Choppiness Index — volatility / trend-vs-range regime oscillator
# Measures whether price is trending or chopping over a lookback window.
# Free for non-commercial use. Attribution to MarketFragments.com appreciated.
declare lower;
input length = 14;
input chopThreshold = 61.8;
input trendThreshold = 38.2;
def tr = TrueRange(high, close, low);
def trSum = Sum(tr, length);
def hh = Highest(high, length);
def ll = Lowest(low, length);
def rng = hh - ll;
plot CI = if rng > 0 then 100 * Log(trSum / rng) / Log(length) else Double.NaN;
CI.SetLineWeight(2);
CI.AssignValueColor(
if CI >= chopThreshold then Color.YELLOW
else if CI <= trendThreshold then Color.CYAN
else Color.GRAY);
plot ChopBand = chopThreshold;
plot TrendBand = trendThreshold;
plot Mid = 50;
ChopBand.SetDefaultColor(Color.DARK_ORANGE);
TrendBand.SetDefaultColor(Color.GREEN);
Mid.SetDefaultColor(Color.GRAY);
Mid.SetStyle(Curve.SHORT_DASH);
AddCloud(CI, chopThreshold, Color.YELLOW, Color.CURRENT);
AddCloud(trendThreshold, CI, Color.CYAN, Color.CURRENT);
AddLabel(yes,
"CHOP " + Round(CI, 1) +
(if CI >= chopThreshold then " | CHOPPY"
else if CI <= trendThreshold then " | TRENDING"
else " | NEUTRAL"),
if CI >= chopThreshold then Color.YELLOW
else if CI <= trendThreshold then Color.CYAN
else Color.GRAY);
Alert(CI crosses below trendThreshold, "Choppiness: entering TREND regime", Alert.BAR, Sound.Ding);
Alert(CI crosses above chopThreshold, "Choppiness: entering CHOP regime", Alert.BAR, Sound.Ding);
```
Drop your tweaks, screenshots, and questions below — that's how the library gets better.