Efficiency

Concept: Definedge

Period: 5

In the Efficiency indicator, two lines are plotted below the chart.

1. Green line represents the Efficiency indicator
2. Red line represents the average of the Efficiency indicator

Traders have to deal with both trends and volatility.

The Efficiency indicator measures the strength of a trend by dividing it by its volatility.

If the Efficiency indicator is above 0, the uptrend is strong, and if it rises above 1, it suggests a very strong uptrend. When the Efficiency indicator falls below 0, it indicates a very significant downtrend. When it falls below 1, it indicates a very strong downtrend.

The indicator table value in TradePoint & RZone also provides you with a list of all values of this indicator for any group of stocks. This will allow you to compare the readings of this indicator across different stocks.

This indicator is also available in the System Builder on RZone & TradePoint for all charting methods. Using the system builder, you can develop various strategies based on the different conditions already present in this indicator. Additionally, it can be used with other indicators or price patterns to develop effective trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.

The indicator is applicable to all types of charting. It is calculated based on the number of columns on P&F charts, bricks on Renko charts, lines on Line-break charts, candles on Heikin-Ashi charts, and lines on Kagi charts. While the formula and reading of the indicators remain the same, they become more dynamic on these charts.