Fractal Energy aka Chop Index for ThinkorSwim

markos

markos

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Name this Study "FractalEnergy" in ToS




Code:
# Attributed to Doc Severson & Mobius at Theotrade 2017.
# The Choppiness Index was created by Australian commodity trader E.W. Dreiss.#
# Name this Study "FractalEnergy" in ToS

declare lower;

input Period = 14;

input l2 = 61.8;
input l1 = 38.2;
input l0 = 25.0;

def sumTR = Sum (TrueRange(high, close, low), Period);
def HMax =  Highest (high, Period);
def LMax =  Lowest (low, Period);

plot FE = 100 * Log (sumTR / (HMax - LMax)) / Log(Period);
FE.SetDefaultColor(Color.ORANGE);
FE.SetStyle (Curve.FIRM);
FE.SetLineWeight(2);

plot line0 = l0;
line0.SetDefaultColor(Color.RED);
#line0.SetStyle (Curve.FIRM);
plot line1 = l1;
line1.SetDefaultColor(Color.CYAN);
#line1.SetStyle (Curve.FIRM);
plot line2 = l2;
line2.SetDefaultColor(Color.BLUE);
#line2.SetStyle (Curve.FIRM);
#EndofCode#
SCAN SETUP:


NOTES:
Mobius, AlphaInvestor, & Harndog discuss Fractal Linear Energy June 6, 2016 TSL - edited by Markos

SYNOPSIS

This indicator does NOT indicate OB or OS but linear or non-linear the closer to 1 the more non-linear (compressed or random) price is. The closer to 0 the more linear (trending) price is.

Fractal Energy isn't an indicator - it's a way of looking at price to see if it's linear or random. There are NO trading signals on the FE study. Only signals NOT to trade. Trend or non-trend. It has nothing that determines which way trend is going, as in up or down.

If the FE is at extremes, something is about to change. It's leading you to a conclusion. If the FE is below .382, price is parabolic and cannot maintain that. But you may not want to sell because it may still go further in it's trend and it may not change direction right away. It's telling you though that it's not going to stay trending at the current rate of speed. If it's over .618 it telling you price is compressing and going sideways rebuilding energy getting ready for another run one way or the other.

Using price in fractals and different times, or ORB with FE and Supertrend or some way to measure when price expansion is contracting or expanding is all you need. Any more than that and you'll be paralyzed by information overload.

No matter what the trader's preferred trading style is, a very informative way to look at anything is using a fractal method. For intraday trading, 2min, 5min, 15min and even one hour charts all with a Fractal energy reading and fractal pivots allows you to easily see the trading patterns and reversal or polarity changes. In other words When higher highs and higher lows are compressing to random sideways action with possible trend changes or just short term aggregations building energy to press on in the trend direction.

In response to the query whether the Fractal Energy is the same concept as the Choppiness Index, if you graph the Choppiness index and the Fractal Linear Efficiency ... they are calculated differently but the shapes are nearly identical for most of their length.
 
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markos

markos

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@Craighaber71 Please read what is in in bold above.
FE is good as a guide but shouldn't have color. Green below .382 denotes exhaustion. Exhaustion, in this case, means that it's done moving.
It's only a SIGN of when not to trade per Mobius & Crew.
That coloring may work for you. If so, that's good, but I feel it could lead many to the wrong conclusion.

(Edit - Markos 7-18-19) - When I re-wrote the study above, it was intended for @Craighaber71 , as he know the system. Anyone else should use the Charts, Scans, and Scripts I re-wrote in these two links:
https://usethinkscript.com/threads/rsi-in-laguerre-time-with-fractal-energy-momentum-trend-indicator.116/ Thank you.
 
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markos

markos

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Definition from TradingView:
The Choppiness Index (CHOP) is an indicator designed to determine if the market is choppy (trading sideways) or not choppy (trading within a trend in either direction). The Choppiness Index is an example of an indicator that is not directional at all. CHOP is not meant to predict future market direction, it is a metric to be used to for defining the market's trendiness only. A basic understanding of the indicator would be; higher values equal more choppiness, while lower values indicate directional trending.
 
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Craighaber71

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I Put up something that works well for me..I look for exhausted energy and the wait for a turn in direction....It has been working great for me....If you use it another way awesome...There's more than 1 way to do something...Thanks for your feedback...
 
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Craighaber71

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If you go watch Doc's video again go to the 23:00 mark...He looks for exhausted signals and waits for the RSI to turn for entry...That's what my watch list is doing...It's looking for exhausted signals.
 
markos

markos

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If you go watch Doc's video again go to the 23:00 mark...He looks for exhausted signals and waits for the RSI to turn for entry...That's what my watch list is doing...It's looking for exhausted signals.
Sorry for the mis-understanding. You have the video and you know what you are doing. Apologize for the harsh tone.
 
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laketrader

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Which video? Can somebody post the link? Very interested in this FE concept.

thanks
 
L

laketrader

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thanks for the video. Craighaber71.

Markos, can you share your scan setup? The study that you shared does not have CI. (only has FE, line0, line1, line2)
 
markos

markos

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@laketrader Please read again from the top. Everything you need is there. The chart, scan and notes are complete for trading the way @Craighaber71 learned and wants to apply it.

At the onset, Doc Severson wrote a white paper that started that training journey. It is copy written and licensed to Theotrade, we cannot post it.

Let's start from the beginning so that there are fewer potential gaps.

Below are the two links you will need to learn the RSI Laguerre w Fractal Energy at it's base level. There are two videos inside, one from co-founder Don Kaufman and the second video, which is also above, is by Doc Severson who taught a three hour course and gave training classes on it often.

The videos are from Theotrade but posted on YouTube, as such, they are shared here with the understanding that all credit due goes to Theotrade via YouTube.

Craig is well qualified to explain this Trading system. After you have read both threads and watched both videos, @Craighaber71 , @mc01439 , or I can help fill in the missing pieces.

 
markos

markos

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@Nick please read what I wrote 3 threads above. Start at the beginning. You need the back ground of the two RSILg with Fractal Energy videos, the tutorials posted on this site, and time before you should jump into an upper level scan. Just the same, if you need help installing the scan, go ahead and get it. Trade well, Markos
 
T

thinky

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How do you setup the scan, the image only shows the final result (3 study filters).

Don't see this "Cl" in the "Edit Condition" window.

 
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markos

markos

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@thinky I spent a good portion of last weekend rewriting these scripts.
One thing I missed, is the picture that shows "CI".
It does not exist anymore but in the picture above you have Plot: FE. That is what has replaced it.
You are on the right track, just keep going and you will have it. :)

Please read entries #3 and #11 above as they pertain to the study.
In Tutorials, there is an article called How to drive the scanner. It has two videos. Please review that if you get stuck.
 
markos

markos

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thanks for the video. Craighaber71.
Markos, can you share your scan setup? The study that you shared does not have CI. (only has FE, line0, line1, line2)
If you saved the study a mentioned at the top, reference that and FE instead of CI in the scanner and that should fix it.
 

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