alexgrover

Efficient Auto Line

More Efficiency

Based on the Auto-Line code, the Efficient Auto Line aim to provide a more controlled adaptivity of the indicator. The first indicator of this sort worked this way : when the absolute difference between the price and the indicator is higher than the previous indicator +/- A pips of amplitude, the indicator will display the closing price, else its anterior value. The second indicator (Auto-Line) was adaptive and used the standard deviation instead of a constant A. This indicator will run both methodology providing both a trend strength indicator (Efficiency Ratio) parameter and two constant parameter.

Parameters

The length parameter will control the period of the efficiency ratio, a high period return lower values of the efficiency ratio. Since its an indicator in a range of (0,1) we use it to make our indicator more adaptive in trending market, this is when we need our two constant parameters, the fast/slow parameter can be any amount of pips where fast < slow, when the price is trending (efficiency ratio close to 1) the indicator will use the fast parameter, if its ranging (efficiency ratio away from 1) the indicator will use the slow parameter, then it will work like the first methodology previously explained. So the fast parameter should be equal to a small movement of pips (0.0001 or 1 pip) and the slow parameter should be equal to a number of pips you wont expect to see in a ranging market. At this point it is good to test for both parameter and see which values work better (a more automatic process is in development).

Hope you like it !
Open-source script

In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.

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You can also check out some of the indicators I made for luxalgo : https://www.tradingview.com/u/LuxAlgo/#published-scripts