Fabii Kaufman Efficiency Ratio

Tired of entering a "trend" that turns out to be chop and stops you out? This filter shows real trends from noise at a glance. Any pair, any timeframe. No repaint. Free trial in the Strategy Tester.

▬▬▬ THE PROBLEM ▬▬▬

Chop is expensive. It fakes a trend just long enough to trap you, then stops you out and moves on.

• You enter a "breakout" and it dies.
• You skip a real move after three fake trends.
• You read three indicators just to guess the market's state.

The hard part isn't seeing that price moves. It's knowing whether the move goes somewhere, or churns in place.

▬▬▬ HOW IT WORKS ▬▬▬

The Kaufman Efficiency Ratio measures one thing: efficiency. It compares the net distance price travelled to the total path it took.

• Straight from A to B: a high ratio, a real efficient trend.
• Zig-zag to the same point: a ratio near zero, just noise.
• Bounded 0 to 1, so it reads the same everywhere.

The colour gives the answer instantly:

• Red: choppy and inefficient. Stay out.
• Gold: in transition. Caution.
• Green: a clean, efficient trend. Go with it.

▬▬▬ KEY FEATURES ▬▬▬

• Instant regime read: three colours on line and histogram.
• No repaint: the signal is final on the closed bar.
• Reads the same everywhere: bounded 0 to 1, no recalibration.
• Multi-timeframe: show a higher timeframe as a staircase.
• Zone-cross alerts: popup, sound, push. Off by default.
• Display mode: line, histogram, or both.
• Optional EMA smoothing, or raw for speed.
• Light and fast on any market and timeframe.

▬▬▬ INPUTS ▬▬▬

(Rebuild as a table in the MQL5 editor: Parameter / What it does / Recommended.)

• ER Period: lookback window of the ratio. Recommended 10.
• EMA Smoothing: steadies the signal, 1 = raw. Recommended 3 on D1.
• Higher TF: read a higher timeframe, Current = off. Default current.
• Low threshold: below this is range. Recommended 0.30.
• High threshold: above this is trend. Recommended 0.50.
• Display mode: line, histogram, or both. Default both.
• Alerts: popup, sound, push on a zone cross. Off by default.
• Bars limit: limit history to N recent bars. On, 500.

▬▬▬ HOW TO USE IT ▬▬▬

• Attach it to any chart. It opens in a sub-window below price.
• Green: an efficient trend, take trend setups.
• Red: choppy range, stand aside or trade smaller.
• Gold: in transition, treat as caution.
• Use it as a filter: your method finds the setup, the colour says if the market is efficient enough to take it.
• For confirmation, set a higher timeframe and trade only when it is green too.

▬▬▬ SUPPORT ▬▬▬

Questions? Message me. I answer within 24h.

▬▬▬ GET IT ▬▬▬

• Launch price 30 USD, rises to 49 USD after the first 20 sales.
• Add it to your chart and stop trading noise as if it were trend.
• Follow my profile for updates and new tools.

For educational and analytical use. No indicator guarantees profit; test it in the Strategy Tester and on demo before trading live.