I've always thought of these two indicators as different, however you made me think. I believe they are trying to measure something similar. I'll take a look at the formulas a little closer and post again unless someone beats me to it.
Last edited by Antisyzygy; July 15th, 2012 at 01:01 AM.
Reason: N/A no changes
The following user says Thank You to Antisyzygy for this post:
So after looking at the formulas, the FDI is based on the Hurst exponent, which is sort of a measure of how a time series is observed to behave around its mean. The PFE dimensionless version is Net Change between bar N and 1 divided by the Path-wise "distance" so to speak. They aren't the same.
I recently became aware of the Polarized Fractile Efficiency indicator reading in Technical Analysis from A to Z by Achelis. I applied it to a few charts in Trade Station. It looked like it might have some merit on short time frames of some trading vehicles (futures, mostly, in my case). I am still very preliminary in my assessment. It was helpful in three out of the four trading days last week. I made money each of the four trading days, but the PFE was only helpful in three of them. I trade mostly on the basis of price and price history. I often put all kinds of indicators on my charts trying to see if something would be helpful. CCI and now maybe PFE add some restraint in some cases and confidence in others to my trading decisions. I changed the level of both the high and low alert levels in the PFE and use it differently than is described in the book and Trade Station definition. I know I am being coy but I don't want to appear foolish by being premature. I have had high hopes for indicators in the past and very few have made me happy in the long run.