Kaufman Efficiency Ratio Indicator
Kaufman efficiency ratio indicator for MT5. Trend reversal indicator for MT5. Overbought/oversold indicator MT5.
Description
The Kaufman Efficiency Ratio Indicator for MetaTrader is a technical trading tool that uses a concept known as the Kaufman Efficiency Ratio to detect trend shift. This intuitive indicator also measures the extremes of an asset’s price.
The indicator is designed to identify extreme (overbought/oversold) price zones, which are marked with numbers 0 and 1. The oversold zone is indicated on the indicator by level 0, and the overbought zone – by level 1.
In addition, this indicator is useful for beginners, intermediate and advanced traders. It can also be used for various trading styles such as scalping, day/intraday trading and swing trading.
How to Trade With The Kaufman Efficiency Ratio Indicator
The screenshot below shows how the indicator will look on your MT5 platform. The indicator is recommended to be used in synergy with price action/other technical indicators.
BUY Signal: First, identify the market bias, in this case a bullish trend. Now wait for the indicator to interact with the oversold zone. You can then open a BUY/LONG entry using price action (eg bullish engulfing, hammer, etc.).
SELL Signal: First, identify the bias of the market, in this case a bearish trend. Now wait for the indicator to interact with the overbought zone. You can then SELL/SHORT using price action (eg bearish engulfing, inverted hammer, etc.).
Conclusion
The Kaufman Efficiency Ratio Indicator for MT5 is a great trading tool that gives you a clear view of different market sentiments. Moreover, it also helps you easily identify trending and sideways (range) markets. Finally, the indicator is free to download.