The energy line in the Energy indicator is calculated by analogy with kinetic energy in physics: E = (mv^2)/2. Tick volumes (money supply) are used as the mass, the “rate of price change” – ROC is taken as the speed.

The direction of the energy (positive or negative) is determined by the direction of the ROC.

The Chaikin Volatility Indicator (CHV) is used as an additional indicator. Since volatility begins to increase before the real price movement begins, CHV signals an increase in market activity in advance. The result of the calculations is an energy release, which is formed, as a rule, before the start of a strong movement. When passing extreme points, the energy line drops sharply to 0. With minor fluctuations or an established trend, the energy is also at minimum levels (about 0).

The pulse line is calculated independently of the energy line. The calculation is based on the differences of three moving averages – TOPIC(12), DEMA(34), MA(55), which are assigned equal weights in modulus. They can be both positive and negative, depending on the signs of the difference in the averages and the direction of the energy line. The pulse line correlates well with the energy line and smooths out its sharp fluctuations.

Moments of opening/closing positions: 

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• Input when changing the direction of the Impulse line to the opposite after reaching the extremum.
• The output is when the extreme of the Energy line is reached.

The recommended values of the Period parameter on different timeframes are as follows: M12 – 14; M15 – 12; M20 – 10; M30 – 8; H1 – 6, i.e. the older the timeframe, the smaller the Period. The indicator has not been tested on timeframes older than H1.

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