TheLark

FREE INDICATOR: POLARIZED FRACTAL EFFICIENCY

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Looking for something other than a moving average to help determine not only a trend's strength, but also it's direction? Try PFE!

PFE was developed by Hans Hannula that was invented to determine price efficiency over a user-defined time period.

The Polarized Fractal Efficiency indicator is, in the essence, an exponentially smoothed ratio of the length of two lines: (1) of a straight line between today’s close and the close Period days ago, and (2) of a broken line connecting all Close points between today and Period days ago. The indicator output varies between -100 and 100. The theory behind this indicator is that if it is >50 (or <-50) then the market is likely to reverse its trend from positive to negative (or from negative to positive).

Other usage:
Securities with a PFE greater than zero are deemed to be trending up, while a reading of less than zero indicates the trend is down. The strengh of the trend is measured by the position of the PFE relative to the zero line. As a general rule, the further the PFE value is away from zero, the stronger and more efficient the given trend is. A PFE value that fluctuates around the zero line could indicate that the supply and demand for the security are in balance and price may trade sideways.

As with all indicators, finding something that works well along side this would be the most beneficial way to use it.
Perhaps something like the Choppiness Index (related idea below) could do the trick.

Grab the source code here: http://pastebin.com/TyTuWQ3s
Installation video by @ChrisMoody here : http://blog.tradingview.com/?p=265
Open-source script

In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.

Want to use this script on a chart?
study(title="TheLark: Polarized Fractal Efficiency", shorttitle="Lark: PFE", overlay=false)

        //•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•//   
        //                                             //
        //   POLARIZED FRACTAL EFFICIENCY BY THELARK   //
        //                 ~ 5-21-14 ~                 //
        //                                             //
        //                     •/•                     //
        //                                             //
        //    https://www.tradingview.com/u/TheLark    //
        //                                             //
        //•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•//

// PFE was developed by Hans Hannula that was invented to determine price efficiency over a user-defined time period. 

// The Polarized Fractal Efficiency indicator is, in the essence, an exponentially smoothed ratio of the length of 
// two lines: (1) of a straight line between today’s close and the close Period days ago, and 
// (2) of a broken line connecting all Close points between today and Period days ago. The indicator output 
// varies between -100 and 100. The theory behind this indicator is that if it is >50 (or <-50) then the market is 
// likely to reverse its trend from positive to negative (or from negative to positive).

// Other useage: 
// Securities with a PFE greater than zero are deemed to be trending up, while a reading of less 
// than zero indicates the trend is down. 
// The strengh of the trend is measured by the position of the PFE relative to the zero line. 
// As a general rule, the further the PFE value is away from zero, the stronger and more efficient 
// the given trend is. A PFE value that fluctuates around the zero line could indicate that the supply 
// and demand for the security are in balance and price may trade sideways.

Length = input(10)
Smoothing = input(5)
SingleColor = input(false, title="Single Color?")
bgcol = input(true, title="Color Background?")

// Calcs
ln = Length - 1
diff = close - close[ln]
pfetmp = 100 * sqrt(pow(diff,2) + pow(Length,2)) / sum(sqrt(1 + pow(close - close[1],2)), Length - 1)
pfe = ema( diff > 0 ? pfetmp : -pfetmp, Smoothing)

// Plots
col = pfe > 50 or pfe < -50 ? #FF8D6F : #FFD9CF
plot(pfe, color=SingleColor ? #FFD9CF : col,linewidth=1)

hline(50, color=#FFD105, linestyle=dotted)
hline(-50, color=#FFD105, linestyle=dotted)
hline(0, color=#FFD105, linestyle=dotted)

bgcolor(bgcol ? col : na)

Kommentarer

TheLark...IS BACK!!!! With the length of that vacation I expect new codes daily for a few weeks....
+1 Svara
TheLark ChrisMoody
haha I'm always busy busy, but I'll try to get more out there, hard to compete with the new talent that's been releasing daily though!
I get what I can out to you guys when I can, usually pieces of automated systems that I'm working on
+3 Svara
I'm going to have to give this one a try
Svara
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