How to use the indicator
The indicator iterates all symbols present in your Market Watch, to find the most attractive to trade based on volatility and efficient price movement. To scan all the symbols your broker offers, make sure to display them all.
The indicator dashboard displays the most attractive symbols, ordered by descending volatility. The most volatile symbol at the time will be displayed at the top. But volatility alone can be deceiving: maybe an instrument is moving a lot but going nowhere. That's why the efficiency value is displayed as well.
The efficiency measures how much of the absolute price movement translates into efficient price movement. For instance, a symbol with a volatility of 10% but an efficiency of 0% would mean that the symbol is suffering tremendous price movements, but closing prices would be the same each day: not so good.
On the other hand, a symbol with the same volatility but an efficiency of 75% is much more desireable: it means the symbol is volatile and that 75% of that volatility translates into sustained price movement. That is the perfect instrument to trade!
Settings and Input Parameters
When loading the indicator to any chart, you will be presented with a set of options as input parameters. Don't despair if you think they are too many, because parameters are grouped into self-explanatory blocks. This is what each parameter does.
- Indicator Settings
- The Volatility Period is the amount of bars used to evaluate volatility from, from each chart. The Efficiency Period is the amount of bars used to evaluate efficiency from.
- Display and Colors
- In this parameter block, you can customize the font sizes and colors of the dashboard, as well as the colors for the different rows of the dashboard according to the efficiency of price movement.