Kaufman Efficiency Ratio Indicator

MetaTrader’s Kaufman Efficiency Ratio indicator is a technical trading tool. It uses the Kaufman Efficiency Ratio concept to determine the trend’s bias. This indicator measures the extremes of an asset’s price.

The indicator is designed to help you identify extreme (overbought/oversold) zones of the price which are marked as 0 and 1. The indicator shows the oversold zone as level 0, while the overbought area is represented by 1.

This indicator is also beneficial for intermediate and advanced traders. You can use it for swing, day/intraday and scalping trading.

How to trade with the Kaufman Efficiency Ratio indicator

This is how the indicator will look on your mt4 platform. It is recommended that the indicator be used in conjunction with other technical indicators such as price action or other technical indicators.

Buy Signal: First, identify the market’s bias, in this instance, a bullish trend. Wait for the indicator’s interaction with the oversold area. You might then be able to open a BUY/LONG trade using price action (e.g. bullish engulfing, hammer, etc. ).

SELL Signal: First, identify the market’s bias, in this instance, a bearish one. Wait for the indicator’s interaction with the overbought area. The SELL/SHORT option can then be opened using price action (e.g. bearish engulfing, inverted hammer, etc. ).

Conclusion

The Kaufman Efficiency Ratio indicator MT4 provides a great tool for trading that shows you the market sentiments clearly. It also allows you to identify sideways and trending markets. The indicator is also free to download.

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