Choppiness is a function of market direction. A market that is trending has a low choppiness number while a trend less market has a high choppiness number. The Choppiness Index ranges between 0 and 100, the higher the index the choppier theprice action is and the lower the index the more trending the price action.
Since Choppiness is a trending indicator it has a length, which sets the look backperiod (This application uses the default length of 14 periods).
When you are done making changes click Apply to make the changes to the current study while the Properties window is open or OK to close the Properties window.
Some traders interpret low Choppiness Index readings to indicate the end of strong impulsive movements either up or down, while high readings occur after significant price consolidations.
Using the Choppiness Index
The Choppiness indicator (CI) has an inverse relationship to price and a trend is considered broken when the CI is below the lower line and reverses. Again this does not tell you the direction of the market it just gives a fundamental different perspective on the general change of a trend. If other signals confirm that this is a turning point, it could be likely that we are headed towards a new trend direction down and it might be a good time to sell, or go short.