QQE (Quantitative Qualitative Estimation) indicator includes a smoothed RSI indicator and two volatility trailing lines: the Fast TL and Slow TL, designed by determining the ATR from the smoothed RSI for a set interval and then even more smoothing the ATR with an extra interval Wilders smoothing. The result of the smoothed ATR of RSI will then be increased by the Fast and Slow ATR Multipliers in order to determine the final Fast and Slow Trailing Lines.
This is useful when determining the right time to open a position, since when each lines of QQE are going in same direction, we have a extremely high possibility of an following move moving forward and being profitable.
QQE Indicator Explained
QQE indicator enables you to get trading signals. Listed below are some of the more usual strategies:
QQE with Crossovers
- RSI crosses above the Fast ATR TL or Slow ATR TL;
- RSI crosses above 50;
- Fast ATR TL crosses over the Slow ATR TL.
- RSI moves under the Fast ATR TL or Slow ATR TL;
- RSI moves under 50;
- Fast ATR TL moves under the Slow ATR TL.
QQE Overbought/Oversold Signal
Very similar to RSI or any other oscillators trading strategy, the QQE indicator enable you to recognize possible overbought and oversold situations of the market. An Overbought scenario is usually identified as the QQE becoming higher than or equal to the 70% value while an oversold situation is usually identified as the QQE getting lower than or equal to the 30% value. Position can be opened when one of the QQE components (RSI, Fast TL or Slow ATR TL) passes across these values. When the RSI, Fast TL or Slow TL moves over 30 we get a long entry signal. Otherwise, when the RSI, Fast TL or Slow TL moves below 70 we get a short entry signal.
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