The Variable Index Dynamic Average (VIDYA) was developed by Tushar Chande. The calculation of this indicator is analogous to that of the Exponential Moving Average (EMA)
with a dynamically adjusted lookback period that depends on relative price volatility. The higher the volatility, the higher the emphasis on price becomes and the faster VIDYA adapts to price changes. Volatility is measured through the Chande Momentum Oscillator (CMO)
. This indicator can be used as any moving average, to identify and trade trends. Traders often use it in combination with other signals and analysis techniques.