A technical indicator that reflects the trendiness or choppiness of the market.
Overview
Introduced in the January 1994 issue of Technical Analysis of Stocks and Commodities magazine, the Polarized Fractal Efficiency indicator (PFE) was developed by Hans Hannula. The PFE is used to gauge how trendy or congested price action is.
The PFE on the GBP/USD Daily Chart 4/4/2011
Source: VT Trader
Interpretation
PFE readings above zero reflect an up-trend; the higher the value the more efficient (trending) the upward movement is. PFE readings below zero reflect a own-trend ; the lower the value, the more efficient (trendy) the downward movement is. Readings around zero indicate choppy, less efficient more “noisy” movement.
