VIDYA - futures trading

Go Back

> Trading Wiki > Terms (Glossary)


Variable (or Volatility) Index Dynamic Average. Also known as VMA as in V(idya) Moving Average.

Variable Index Dynamic Average (VIDYA) is a special moving average which was developed by Tushar Chande. The complete details about this technical indicator can be found in The New Technical Trader by Tushar Chande and Stanley Kroll.

VIDYA is essentially a dynamic exponential moving average wherein the market volatility is also taken into consideration; this is achieved by using Chande Momentum Oscillator (CMO) as a measure of market volatility. The averaging period depends on the market volatility, and VIDYA moves faster as the short-term volatility increases, whereas it slows down when market volatility decreases.

This indicator needs two input parameters (a) Time period over which VIDYA needs to be averaged and (b) Time period over which volatility has to be estimated, basically this is the period over which CMO is calculated.

VIDYA is calculated in the following way:

First of all CMO is calculated using the following formula:

CMO(i) = (UpSum(i) - DnSum(i))/(UpSum(i) + DnSum(i))


UpSum(i) - current sum of positive price increments for the given period;
DnSum(i) - current sum of negative price increments for the given period.

This CMO is then used to estimate VIDYA

VIDYA(i) = Price(i) * F * ABS(CMO(i)) + VIDYA(i-1) * (1 - F* ABS(CMO(i)))


F = 2/(Period_EMA+1) - smoothing factor;
ABS(CMO(i)) - absolute current value CMO;
VIDYA(i-1) - previous value of VIDYA.

Read more:

See also:

For a blast from the past, see this:

Reference book:

A related indicator is the ADXVMA
Created by  steve2222 , July 6th, 2016 at 05:59 AM
0 Comments, 197 Views
Page Tools
Search this Page

Posting Rules
You may not create new articles
You may not edit articles
You may not protect articles

You may not post comments
You may not post attachments
You may not edit your comments

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

All times are GMT -4. The time now is 02:23 AM.

Copyright © 2016 by All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.

Page generated 2016-10-23 in 0.08 seconds with 18 queries on phoenix via your IP