This indicator calculates how much has a symbol moved in relative terms to find trending or flat markets. It displays what percentage of the latest price range is directional.
- A value of zero means the market is absolutely flat
- A value of 100 means the market is totally trending
- The blue line means the price range is healthy
- The red line means the price range is narrow
- The moving average is the flat market index (FMI)
It has straightforward trading implications.
- Use trend-trading strategies when the line is blue and above the FMI
- Use range-trading strategies when the line is red and below the FMI
- Perform instrument selection based on the FMI