The Polarized Fractal Efficiency (PFE) indicator is designed for identifying trends.

There are four input parameters:

  • Fast ROC period - fast ROC (Rate of Change) calculation period;
  • Slow ROC period - slow ROC (Rate of Change) calculation period;
  • MA period - MA calculation period;
  • PDS - oscillator scale factor.

Calculations:

PFE = EMA(B, MA period)

where:

  • If Close > Close[Slow ROC period]:

    B = 100.0 * Z

  • Else:

    B = -100 * Z

Z = Sqrt(LongROC * LongROC + 100) / (Sqrt(ShortROC * ShortROC+1) + PDS)
LongROC = 100.0 * (Close / Close[Slow ROC period]-1)
ShortROC = 100.0 * (Close / Close[Fast ROC period]-1)

Interpretation:

  • Oscillator value above zero - uptend;
  • Oscillator value below zero - downtend.