One of the most flexible yet unknown indicators

The PFE is one of the most flexible indicators in the NanoTrader. Unfortunately PFE is not widely known and thus rarely used. Its flexibility comes from the fact that it can be used both for entries in a trend following strategy or a swing trading strategy.

The PFE has four input parameters:
(1) the number of periods over which the PFE would be calculated,
(2) the number of periods to smooth the original calculation called "smoothness span" and,
two thresholds (3 & 4) to generate corresponding entry signals.

You can change these parameters to use the PFE for the different entries. Here are two examples: 

A. In this first example we have used the PFE as a trend-following entry by using the default span parameters and
interpretation values. Note that we used closer threshold values to go Long if the PFE moves away from the zero line
above the level of 10 and to go short below -10.

B. In this second example we have changed the thresholds to +50 and -50 to define overbought and oversold levels.
These values represent a swing entry strategy to go long if the PFE returns above -50 and leaves the oversold zone and to go short if the PFE is drops below +50 and leaves the overbought level to return to zero.

  Note that you need to change the interpretation sentiments to the levels shown in the picture above to switch the PFE interpretation to an oscillator.