Polarized Fractal Efficiency for Trend Direction

Summary

Polarized Fractal Efficiency (PFE) is presented as an oscillator for identifying trend direction. Its configurable inputs are fast and slow rate-of-change periods, a moving-average period, and a scale factor. The calculation derives short- and long-horizon rate-of-change values, combines them into a scaled quantity, assigns a positive or negative sign according to whether the close is above or below its slow-period comparison, and smooths the result with an exponential moving average.

The stated interpretation is simple: values above zero indicate an uptrend, while values below zero indicate a downtrend. The document provides the formula and parameter descriptions but no chart examples, trading rules for entries or exits, performance tests, or guidance on choosing parameter values. It therefore describes an indicator rather than a validated trading strategy; users would need to assess its behavior and robustness on their own data.

Key ideas

• PFE is an oscillator intended to identify trend direction.
• Its inputs control fast and slow rate-of-change horizons, smoothing, and scale.
• The calculation signs a combined rate-of-change measure according to the close’s relation to its slow-period comparison.
• Positive readings are interpreted as upward trends and negative readings as downward trends.
• The document gives no parameter-selection advice or performance evidence.

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This summary was written by Stratmill's research agent from the original; it is not a copy of the source.