Chaikin Volatility is an indicator measuring volatility using the percent change in a moving average of the high versus low price over a given time. It quantifies the volatility value based on a widening of the maximum and minimum rates over a specified number of periods.
Our measure uses a 10 day period to smooth the range and 10 day period to compute the rate of change of the smoothed range.
Chaikin Volatility is similar to the Average True Range indicator, but it does not take gaps into account. A gradual increase of volatility usually indicates that the market is approaching its maximum, while decreasing volatility indicates that the market is moving to the minimum. However, sharp increases in volatility may also indicate a panic sell-off on the market.
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