How to Set Kaufman Efficiency Ratio on MetaTrader 4 Charts
Step 1: Open the Navigator Window on Trading Software Platform
Open the Navigator window just as illustrated: Go to the 'View' menu (press on it), then select 'Navigator' window (press), or From Standard Toolbar click the 'Navigator' button or press key board short-cut keys 'Ctrl+N'
On Navigator panel, choose 'Indicators', (DoublePress)
How to Integrate the Kaufman's Efficiency Ratio Indicator onto the MT4 Platform - Utilizing the MT4 Kaufman's Efficiency Ratio Technical Indicator
Step 2: Expand the Indicators Menu on the Navigator - Adding Kaufman Efficiency Ratio MT4 Indicator
Expand this menu by pressing the enlarge(+) tool/button mark point '+' or doubleclick the 'indicators' menu, afterwards this particular specified button will appear and be shown as (-) & will now display a list like is shown - select the Kaufman Efficiency Ratio chart indicator from this list of indicators so that to add the Kaufman Efficiency Ratio to the chart.
How to Add Kaufman Efficiency Ratio - From the window above, you can then add the Kaufman Efficiency Ratio that you, as a trader, want on the chart.
How to Set Custom Kaufman Efficiency Ratio to MT4
If the indicator is custom, like the Kaufman Efficiency Ratio you want to add, first place it in MetaTrader 4. Then compile it. This makes the new Kaufman Efficiency Ratio show up in the list of custom indicators on the MT4 platform.
To understand how to install Kaufman Efficiency Ratio indicators in the MT4 Platform, how to add the Kaufman Efficiency Ratio panel to MT4, and how to incorporate the Kaufman Efficiency Ratio custom indicator on the MetaTrader 4 Platform, please refer to the instructions on adding a custom Kaufman Efficiency Ratio in the MT4 Software.
About Kaufman Efficiency Ratio Tutorial PDF
Kaufman Efficiency Ratio Forex Analysis Signals
Made and put together by Perry Kaufman. Talked about in detail in his book called "New Trading Strategies and Techniques and Methods".
The Kaufman Efficiency Indicator calculates the relationship between the market's relative speed and its corresponding volatility. Traders frequently employ Kaufman efficiency as a filter to sidestep trading during periods when the market is experiencing "choppiness" or moving sideways within a contained range. The indicator also serves to highlight smoother price trends. This is an oscillator indicator that fluctuates between +100 and -100, with zero representing the midpoint. Readings toward +100 signify an upward trending market, while readings toward -100 indicate a downward trending market.
Kaufman Efficiency Ratio
The Efficiency indicator measures price change over n periods. It divides the net move by the total of all bar changes. Those changes use absolute values over the same periods.
FX Analysis and How to Generate Trading Signals
Kaufman is used to generate trading signals as follows:
The more consistently smooth the progression of the market trend formation, the higher the Efficiency Ratio indicated by the metric. Efficiency Ratio readings near zero suggest significant market choppiness, indicating substantial inefficiency or erratic movement within the price trend (characteristic of range-bound markets).
- If the Efficiency Ratio shows a reading of +100 for a forex pair, then that currency pair is trending upwards with perfect efficiency.
- If the Efficiency Ratio shows a reading of -100 for a fx currency pair, then that fx currency is trending downwards with perfect efficiency.
Yet, no market trend can achieve a perfect efficiency ratio. Any pullback against the trend during the period lowers the ratio. It is hard to avoid these moves.
Bullish/Buy Trading Signal
Efficiency Ratio values above +30 show a smoother uptrend.
Buy signal is generated/derived above center line mark.
Buy Trading Signal
Bearish/Sell Trade Signal
Efficiency Ratio values below -30 show a smoother down-trend.
Sell Signal is generated/derived below zero center line mark.
Sell Signal
Experimenting with various values when setting parameters allows traders to identify optimal levels for specific currency pairs and techniques suited to their approach.
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