The Efficiency Ratio (ER) is a technical indicator that measures relative trend strength based on changes in close price on different timeframes. It is equal to the ratio of the change in close price over a period to the total sum of changes in close price recorded on the bar-by-bar basis over the same period.

The Efficiency ratio produces values that range from 0.0 to 1.0, higher values possibly indicating stronger trending conditions. Its main plot is accompanied with a fixed trend level: when study values surpass this level, the study indicates that a trend might be currently developing.

Input Parameters

length Defines the period upon which the calculations of the total sum and the net change are performed.
level Defines the minimum value level for the trend to be recognized.


ER The main Efficiency Ratio plot.
TrendLevel The minimum trend level.


*For illustrative purposes only. Not a recommendation of a specific security or investment strategy.