139 Polarized Fractal Efficiency

Polarized Fractal Efficiency’s signature characteristic is its use of fractal geometry in determining how efficiently a security’s price is moving. It determines the strength and direction of the trend.

Figure 14.1: Polarized Fractal Efficiency

The Polarized Fractal Efficiency (PFE) indicator measures the strength of the trend by its position relative to the zero line. As a general rule, the further the PFE value is away from zero, the stronger and more efficient the given trend is. A PFE value that fluctuates around the zero line could indicate that the supply and demand for the security are in balance and the price may trade sideways.

A reversal in the direction of the PFE indicator and its movement away from zero is generally considered a buy signal.

Figure 14.2: Polarized Fractal Efficiency