Variable Index Dynamic Average indicator
Variable Index Dynamic Average (VIDYA) is the technical indicator MA with the dynamic averaging period. It was developed by Tushar Chande and it is the original method of calculating the exponential moving average with the dynamic changing period of averaging. The averaging period depends on the volatility of the market. The Chande Momentum Oscillator (CMO) was chosen to measure the volatility.
The CMO measures the ratio between the sum of positive increments and sum of negative increments for a certain period (CMO period). CMO value is used as a factor to the smoothing factor EMA.
Also, the VIDYA indicator contains two additional lines (green and red lines). Each of them can be moved relative to the main line for N points.