Polarized Fractal Efficiency - PFE

DEFINITION of 'Polarized Fractal Efficiency - PFE'

A technical indicator developed by Hans Hannula that was invented to determine price efficiency over a user-defined time period. This indicator fluctuates between -100 and +100 with 0 as the center line. Securities with a PFE greater than zero are deemed to be trending up, while a reading of less than zero indicates the trend is down.

BREAKING DOWN 'Polarized Fractal Efficiency - PFE'

The strengh of the trend is measured by the position of the PFE 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 price may trade sideways.

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    A common strategy used with the polarized fractal efficiency (PFE) indicator is to initiate trades that anticipate a market ... Read Full Answer >>
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