This indicator assesses how successful this current market motion relies on the real maximum-minimum ratio
a certain number of bars.

[ manual
installation directions | Manual
by update | Elimination
troubleshooting | FAQ
| All
products ]

• The coefficient of efficiency of the market movement
• A ratio below 1 signifies the market is moving nowhere
• A ratio over 1 signifies that the market is starting to display direction
• A ratio above 2 means that the market is showing effective movement
• A ratio above 3 means that the market has moved too much: it will stop or regain

This has direct trade implications.

• search for positional opportunities when the line is red
• Look for trading opportunities in the range when the coefficient is orange
• Look for opportunities to trade with the trend, when the ratio of blue

How is the indicator calculated?

The indicator shows how many typical true ranges the market has moved over the desired number of bars. The typical true range –
this is the average true range of the high and low from the last number of bars, which is later compared to the absolute
market movement over the same time period. The indicator coefficient gives you a measure of market performance, like the ratio between the range and
the movement of the market. Zero means that the market is not efficient and goes nowhere.

settings

The indicator has only one parameter: the indicator period, which is the number of bars for the reverse evaluation.

author

Arturo Lopez Perez, private investor and speculator, software engineer and founder of Point Zero Trading Solutions.