How to Add Kaufman Efficiency Ratio Indicator on MetaTrader 4 Charts
Step 1: Open Navigator Window on Software
Open Navigator panel as shown & illustrated below: Go to 'View' menu (click on it), then select 'Navigator' panel (click), or From Standard Tool Bar click the 'Navigator' button or press keyboard shortcut keys 'Ctrl+N'
On Navigator panel, choose 'Indicators', (DoubleClick)
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 clicking the expand button marker (+) or double click 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 as to add the 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 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 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 window 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 indicator also helps to identify smoother market trends. This is an oscillator indicator that oscillates between +100 & -100, where zero is the center point. +100 is upwards trending market & -100 is downwards trending markets.
Kaufman Efficiency Ratio
The Efficiency indicator is calculated by dividing the net change in price movement over an n number of periods by the sum of all the bar-to-bar price changes taken as a absolute values over these same n periods.
Forex Analysis and How to Generate Trading Signals
The 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 indicator. Efficiency Ratio value readings of around zero indicate a lot of inefficiency or "choppiness" in the market trend movements (ranging markets).
- If the Efficiency Ratio shows a reading of +100 for a forex pair, then that ++forexforex 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 is almost impossible for a market trend to have a perfect efficiency ratio since any retracement movement against the current trend direction during the time period being used to calculate the indicator would decrease the efficiency ratio.
Bullish/Buy Signal
Efficiency Ratio values above +30 indicate a smoother uptrend.
Buy signal is generated above center-line mark.
Buy Signal
Bearish/Sell Signal
Efficiency Ratio values below -30 indicate a smoother downtrend.
Sell Signal is generated below zero center-line mark.
Sell 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.
