OPEN-SOURCE SCRIPT
Updated Efficiency Ratio (Kaufman)
or "Generalized fractal efficiency"
Measures price trend effectiveness. Where 1.00 is trending and 0.00 not.
Calculation:
ER = Change / Sum of absolute changes
where "Change" is a price change over specified period and "Sum of Changes" sum of absolute price movements within that period
As an example, to calculate 5-day ER you have to calculate 5-day change and then calculate absolute sum of each day movements:
5-day ER = 5-day change / (|day 1 change| + |day 2 change| + |day 3 change| + |day 4 change| + |day 5 change|)
Source: marketvolume.com/technicalanalysis/efficiencyratio.asp
Measures price trend effectiveness. Where 1.00 is trending and 0.00 not.
Calculation:
ER = Change / Sum of absolute changes
where "Change" is a price change over specified period and "Sum of Changes" sum of absolute price movements within that period
As an example, to calculate 5-day ER you have to calculate 5-day change and then calculate absolute sum of each day movements:
5-day ER = 5-day change / (|day 1 change| + |day 2 change| + |day 3 change| + |day 4 change| + |day 5 change|)
Source: marketvolume.com/technicalanalysis/efficiencyratio.asp
Release Notes
correct chart nowRelease Notes
Bumped to V5Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.