Merged Efficiency & Time-Based Oscillator

10월 23일

This indicator is a fusion of two key trading concepts: the Efficiency Ratio and the Time-to-Change RSI, designed to give a comprehensive analysis of market movement and trend sustainability.

Efficiency Ratio (ER): This part of the indicator measures how effectively the market is moving in a certain direction by comparing net price change to the total price movement over a set period. The ratio helps identify whether the market is trending smoothly or experiencing choppy, inefficient moves. A higher ratio indicates more efficient, directional movement, while a lower ratio suggests market noise or indecision.

Time-to-Change RSI: This section tracks both the duration and value of upward and downward price movements. It calculates how much time is spent in upward or downward trends (gain time vs. loss time) and the size of these price changes. The Time-to-Change RSI and the Value RSI provide insight into how long and how strongly the market has been moving in one direction, helping traders gauge potential shifts in momentum.

By merging these two indicators, the resulting oscillator offers a more dynamic signal that highlights both market efficiency and momentum. The combined output shows how efficiently the market is trending while also taking into account the time spent in these trends and the relative strength of price changes. This allows traders to detect possible trend reversals, overbought/oversold conditions, and shifts in market momentum.

The indicator plots the merged signal, as well as overbought and oversold thresholds.

Oversold and overbought levels seem to be really effective