How to Add Kaufman Efficiency Ratio Indicator on MetaTrader 4 Charts

Step 1: Open Navigator Window on Trading Platform Software

Open Navigator window as shown & illustrated below: Go to 'View' menu (press on it), then select 'Navigator' window (press), or From Standard Tool Bar click the 'Navigator' button or press key-board shortcut keys 'Ctrl+N'

On Navigator panel, choose 'Indicators', (DoublePress)

How to Add Kaufman Efficiency Ratio Indicator on MT4 - How Do You Use Kaufman Efficiency Ratio Indicator in Forex?

How to Add Kaufman Efficiency Ratio Indicator on MetaTrader 4 - MT4 Kaufman Efficiency Ratio Indicator

Step 2: Expand the Indicators Menu on the Navigator - Adding Kaufman Efficiency Ratio MT4 Indicator

Expand the menu by pressing the expand(+) button marker (+) or doubleclick the 'indicators' menu, after this the button will appear as (-) and will now display a list as shown below - select the Kaufman Efficiency Ratio chart indicator from this list of indicators so that to add the Kaufman Efficiency Ratio indicator to the chart.

How to Add Kaufman Efficiency Ratio Indicator on the Chart

How to Add Kaufman Efficiency Ratio Indicator - From the Above window you can then place Kaufman Efficiency Ratio indicator that you as a trader want on the chart

How to Add Custom Kaufman Efficiency Ratio Indicator to MT4

If the technical indicator you want to add is a custom indicator - for example if the Kaufman Efficiency Ratio technical indicator you as a trader want to add is a custom indicator you will need to first add this custom Kaufman Efficiency Ratio indicator on the MT4 platform & then compile custom Kaufman Efficiency Ratio indicator so that the newly added Kaufman Efficiency Ratio custom indicator pops up on the list of custom technical indicators in Meta Trader 4 trading platform.

To learn how to install Kaufman Efficiency Ratio indicators on MT4, how to add Kaufman Efficiency Ratio indicator panel to MT4 and how to add Kaufman Efficiency Ratio custom indicator in MT4 - How to add a custom Kaufman Efficiency Ratio indicator in MetaTrader 4.

About Kaufman Efficiency Ratio Technical Indicator Tutorial PDF

Kaufman Efficiency Ratio Forex Analysis Signals

Created by Perry Kaufman. Described in his book entitled "New Systems & Techniques".

The Kaufman Efficiency measures the ratio of the relative market speed in relation to volatility. Kaufman efficiency is often used by traders as a filter to help avoid trading when the market is "choppy" or flat ranging markets. The trading indicator also helps to identify smoother price trends. This is an oscillator trading that oscillates between +100 & -100, where zero is the center point. +100 is upwards trending market & -100 is downwards trending markets.

How to Use Kaufman Efficiency Ratio Indicator - How Do I Add Kaufman Efficiency Ratio Indicator on MT4 Charts?

Kaufman Efficiency Ratio

The Efficiency indicator is calculated by dividing the overall net change of the price movement over an n-number of periods by the sum of all the bar to bar market price changes which is taken as absolute values over these same n-periods.

Forex Analysis and How to Generate Trading Signals

Kaufman is used to generate trading signals as follows:

The smoother the manner in which the market is trending then the greater the Efficiency Ratio shown by the trading indicator. Efficiency Ratio value readings of around zero indicate a lot of inefficiency or "choppiness" in the price trend movements (ranging markets).

If the Efficiency Ratio shows a reading of +100 for a forex pair, then that forex pair is trending upwards with perfect efficiency.
If the Efficiency Ratio shows a reading of -100 for a currency pair, then that currency is trending downwards with perfect efficiency.

However, it's almost impossible for a market trend movement to have perfect efficiency ratio since any price retracementpullback movement against the current trend direction during the trading time period that is being used to calculate the technical indicator would decrease the efficiency ratio.

Bullish/Buy Trading Signal

Efficiency Ratio values above +30 indicate a smoother uptrend.

Buy signal is generated above centerline mark.

How Do I Use Kaufman Efficiency Ratio Indicator? - How to Add Kaufman Efficiency Ratio Indicator in MT4 Charts

Buy Trading Signal

Bearish/Sell Trade Signal

Efficiency Ratio values below -30 indicate a smoother down-trend.

Sell Trade Signal is generated below zero centerline mark.

How Do You Use Kaufman Efficiency Ratio Indicator? - How to Add Kaufman Efficiency Ratio Indicator on MT4 Charts

Sell Trading Signal

However, it is good you experiment with other values to determine the most appropriate levels for the currency pair being traded and the value that is the best for your technique that you're using.

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