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- study(title="TheLark: Polarized Fractal Efficiency", shorttitle="Lark: PFE", overlay=false)
- //•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•//
- // //
- // POLARIZED FRACTAL EFFICIENCY BY THELARK //
- // ~ 5-21-14 ~ //
- // //
- // •/• //
- // //
- // https://www.tradingview.com/u/TheLark //
- // //
- //•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•//
- // PFE was developed by Hans Hannula that was invented to determine price efficiency over a user-defined time period.
- // The Polarized Fractal Efficiency indicator is, in the essence, an exponentially smoothed ratio of the length of
- // two lines: (1) of a straight line between today’s close and the close Period days ago, and
- // (2) of a broken line connecting all Close points between today and Period days ago. The indicator output
- // varies between -100 and 100. The theory behind this indicator is that if it is >50 (or <-50) then the market is
- // likely to reverse its trend from positive to negative (or from negative to positive).
- // Other useage:
- // Securities with a PFE greater than zero are deemed to be trending up, while a reading of less
- // than zero indicates the trend is down.
- // The strengh of the trend is measured by the position of the PFE relative to the zero line.
- // As a general rule, the further the PFE value is away from zero, the stronger and more efficient
- // the given trend is. A PFE value that fluctuates around the zero line could indicate that the supply
- // and demand for the security are in balance and price may trade sideways.
- Length = input(10)
- Smoothing = input(5)
- SingleColor = input(false, title="Single Color?")
- // Calcs
- ln = Length - 1
- diff = close - close[ln]
- pfetmp = 100 * sqrt(pow(diff,2) + pow(Length,2)) / sum(sqrt(1 + pow(close - close[1],2)), Length - 1)
- pfe = ema( diff > 0 ? pfetmp : -pfetmp, Smoothing)
- // Plots
- col = SingleColor ? #FFD9CF : pfe > 50 or pfe < -50 ? #FF8D6F : #FFD9CF
- plot(pfe, color=col,linewidth=1)
- hline(50, color=#FFD105, linestyle=dotted)
- hline(-50, color=#FFD105, linestyle=dotted)
- hline(0, color=#FFD105, linestyle=dotted)
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