Adaptive Efficiency Ratio EMA

Efficiency ratio was invented by Perry Kaufman as a measure of volatility and as a way of making some calculations adaptive. In his adaptive moving average he uses 3 periods for calculation which makes it a bit “cryptic” and, by all means, not so simple to use. This version is simplifying the whole thing without an intention to clone the KAMA indicator – but with an intention to use the efficiency ratio for adapting the average calculations and to use only two parameters for that :

  • period
  • price
  • No other parameters needed
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Know about this indicator

Perry Kaufman created this Adaptive efficiency ratio as a volatility indicator and a method of making some calculations flexible. He employs three periods to calculate his adaptive moving average, which makes it somewhat “cryptic” and, by all means, more difficult to apply.

This version streamlines everything without trying to replicate the KAMA indication. Instead, it uses the efficiency ratio to modify average computations and only requires two parameters:

  • Period/price
  • Other conditions are not required

Usage

Any other moving average type indicator can be used with it.
By using this free MT5 indicator, you’ll be able to make more informed decisions while trading stocks and other securities.