OPEN-SOURCE SCRIPT
Normalized EFI
Normalized EFI (nEFI)
The Normalized EFI (nEFI) is a volume-weighted momentum oscillator that refines the classic Elder Force Index (EFI) by normalizing it against average trading volume. This makes it highly adaptable across different assets, timeframes, and market conditions—especially useful when comparing momentum strength between low- and high-volume instruments.
How It Works:
Relative Price Change: Measures the percentage change in price from the prior bar:
(Close - Close[1]) / Close[1]
Volume Normalization: Divides current volume by its EMA (default: 30 periods) to create a relative volume factor:
Volume / EMA(Volume, 30)
Normalized Force: Combines the two:
nEFI_raw = PriceChange% × RelativeVolume × 100
Smoothing: Applies an EMA (default: 13 periods) to reduce noise and highlight meaningful trends.
Key Features & Inputs:
Smoothing Length (default: 13): Controls responsiveness of the EMA smoothing.
Volume EMA Length (default: 30): Sets the lookback for volume normalization—longer values create a more stable baseline.
Zero Line Centered: Positive values indicate buying pressure; negative values show selling pressure.
How to Use:
Trend Confirmation: Rising nEFI above zero supports bullish trends; falling below zero confirms bearish moves.
Divergences: Look for price making new highs/lows while nEFI fails to follow — often signals reversal.
Zero Line Crossovers: Cross above zero = potential buy signal; cross below = sell signal.
Extreme Readings: Spikes far from zero may indicate overbought/oversold conditions or climax moves.
Advantages:
Volume-Adaptive: Unlike raw EFI, nEFI scales properly across assets with vastly different volume profiles (e.g., stocks vs. crypto).
Consistent Scaling: Values are intuitive and comparable over time and across symbols.
Reduced Noise: EMA smoothing filters out erratic volume spikes common in illiquid markets.
Cross-Market Friendly: Works reliably on forex, futures, stocks, and crypto without manual recalibration.
Ideal for:
Swing traders, momentum strategies, and multi-asset analysis seeking a clean, interpretable measure of volume-adjusted price force.
The Normalized EFI (nEFI) is a volume-weighted momentum oscillator that refines the classic Elder Force Index (EFI) by normalizing it against average trading volume. This makes it highly adaptable across different assets, timeframes, and market conditions—especially useful when comparing momentum strength between low- and high-volume instruments.
How It Works:
Relative Price Change: Measures the percentage change in price from the prior bar:
(Close - Close[1]) / Close[1]
Volume Normalization: Divides current volume by its EMA (default: 30 periods) to create a relative volume factor:
Volume / EMA(Volume, 30)
Normalized Force: Combines the two:
nEFI_raw = PriceChange% × RelativeVolume × 100
Smoothing: Applies an EMA (default: 13 periods) to reduce noise and highlight meaningful trends.
Key Features & Inputs:
Smoothing Length (default: 13): Controls responsiveness of the EMA smoothing.
Volume EMA Length (default: 30): Sets the lookback for volume normalization—longer values create a more stable baseline.
Zero Line Centered: Positive values indicate buying pressure; negative values show selling pressure.
How to Use:
Trend Confirmation: Rising nEFI above zero supports bullish trends; falling below zero confirms bearish moves.
Divergences: Look for price making new highs/lows while nEFI fails to follow — often signals reversal.
Zero Line Crossovers: Cross above zero = potential buy signal; cross below = sell signal.
Extreme Readings: Spikes far from zero may indicate overbought/oversold conditions or climax moves.
Advantages:
Volume-Adaptive: Unlike raw EFI, nEFI scales properly across assets with vastly different volume profiles (e.g., stocks vs. crypto).
Consistent Scaling: Values are intuitive and comparable over time and across symbols.
Reduced Noise: EMA smoothing filters out erratic volume spikes common in illiquid markets.
Cross-Market Friendly: Works reliably on forex, futures, stocks, and crypto without manual recalibration.
Ideal for:
Swing traders, momentum strategies, and multi-asset analysis seeking a clean, interpretable measure of volume-adjusted price force.
Script open-source
In pieno spirito TradingView, il creatore di questo script lo ha reso open-source, in modo che i trader possano esaminarlo e verificarne la funzionalità. Complimenti all'autore! Sebbene sia possibile utilizzarlo gratuitamente, ricorda che la ripubblicazione del codice è soggetta al nostro Regolamento.
Declinazione di responsabilità
Le informazioni ed i contenuti pubblicati non costituiscono in alcun modo una sollecitazione ad investire o ad operare nei mercati finanziari. Non sono inoltre fornite o supportate da TradingView. Maggiori dettagli nelle Condizioni d'uso.
Script open-source
In pieno spirito TradingView, il creatore di questo script lo ha reso open-source, in modo che i trader possano esaminarlo e verificarne la funzionalità. Complimenti all'autore! Sebbene sia possibile utilizzarlo gratuitamente, ricorda che la ripubblicazione del codice è soggetta al nostro Regolamento.
Declinazione di responsabilità
Le informazioni ed i contenuti pubblicati non costituiscono in alcun modo una sollecitazione ad investire o ad operare nei mercati finanziari. Non sono inoltre fornite o supportate da TradingView. Maggiori dettagli nelle Condizioni d'uso.