Efficiency Ratio
Overview
Efficiency Ratio
{% ER = Change/Vol %}
{% Change = Abs(Close - Begining Close) %}
The change is the value of the close, minus the value of the close n periods ago, where n is the time frame
of the KAMA.
{% Vol = \sum_1^n Abs(Close_{i+1} - Close_i) %}
Volatility is equal to the sum of the absolute value of the changes in the close over the last n number of periods.
Total Efficiency Ratio
The total efficieny ratio uses the
Distance
measure to include in the calculation of total distance, the distance the asset has traveled during each trading day.
