The Variable Index Dynamic Average (VIDYA) is an MT4 moving average indicator, best known for its high sensitivity over price-action changes.
This indicator offers wide versatility and lets you use it for various purposes. For instance, you can apply it for determining market trends, dynamic support/resistance, crossovers with other MAs, etc.
Variable Index Dynamic Average (VIDYA) Overview
Both VIDYA and Exponential Moving Average (EMA) work in a similar fashion. They move fast and respond quickly to changes in prices.
Most importantly, variables index dynamic average works in all timeframes and fits any forex and stock charts. Eventually, it allows traders to roam around the market freely and choose any financial instruments for trading.
Variable Index Dynamic Average (VIDYA) Explanation
You can either use VIDYA alone as a solo trend finder or combine it with a slower moving average for plotting crossover signals. However, in both cases, the VIDYA level works as the central dynamic trendline.
When applying VIDYA as a solo indicator, determine the trend conditions depending on whether the price remains above or below the moving average position. If you’re using it along with a 50 SMA (Simple Moving Average), we’ll wait for crossover signals to confirm an entry.
For example, the VIDYA curve moves above the 50 SMA level means it is a bullish crossover. Conversely, the indicator slope turns below the SMA, signaling a bearish crossover of the market trend.
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Variable Index Dynamic Average (VIDYA): Buy Conditions
- The price remains higher than the VIDYA average
- The VIDYA curve crosses above the 50 SMA level
- SL below 50 SMA
- Take profit after the indicator demonstrates a bearish crossover
Variable Index Dynamic Average (VIDYA): Sell Conditions
- The price drops below the VIDYA average
- The VIDYA line moves below the 50 SMA
- SL above 50 SMA
- Exit short when the indicator plots a bullish crossover
