Chaikin Volatility (CHV) is an indicator that was developed by Marc Chaikin. It measures volatility by looking at the price`s highs and lows in a specific time period that can be set. The exact calculation involves an Exponential Moving Average (EMA)
, but in general: the more the range between the highs and lows widens, the higher price volatility. The indicator can be used in several ways, either to predict a potential trend change (if volatility decreases for a longer period of time) or to assess risk (if volatility suddenly increases, pointing to nervous traders). CHV is often used in combination with other signals and analysis techniques.