Chande's Variable Index Dynamic Average (VIDYA)

Chande's Variable Index Dynamic Average (VIDYA) is similar to the Exponential Moving Average (EMA), but automatically adjusts the smoothing weight based on price volatility.

VIDYA was developed by Tushar Chande and presented in Technical Analysis of Stocks & Commodities magazine in March 1992. In the first version, a standard deviation was used as the Volatility Index. Chande modified VIDYA in October 1995 to use a new Chande Momentum Oscillator (CMO) as the Volatility Index.

VIDYA itself is not usually used in trading, but instead its upper and lower borders (bands) that are N% above and below VIDYA.


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