QQE

Notes:

These indicators and concepts are specifically designed for TradingView.com

Overview

The Quantitative Qualitative Estimation (QQE) indicator is a technical analysis tool that aims to identify trends and momentum in the price movements of an asset. The QQE indicator is based on the Moving Average Convergence Divergence (MACD) and uses a combination of smoothed Moving Averages and a volatility-based trailing stop to provide trading signals. This modded QQE that we use in our strategiea actually consists of two seperate QQE's put together. One that is shown on the chart as columns, and the other "hidden" in the background which also has a 50 MA acting as a zero lin

How to Trade

When both of the QQE agree you get either a blue or red bar. The signal line that is the white line in the middle acts as a way for you to visualize the strength or future direction of the trend to help see when a red or blue crossover is about to occur. You can use the blue histogram as a bullish signal and a red histogram as a bearish signal. However we can also use traditional QQE methods as well. Trading signals can be generated from the QQE indicator in a few ways:

1. Crossovers: When the blue line crosses above the red line, it can be a signal to buy. Conversely, when the blue line crosses below the red line, it can be a signal to sell.
2. Overbought/oversold conditions: When the blue line reaches a certain level (e.g., above 50), it can be considered overbought, indicating a potential sell signal. Conversely, when the blue line reaches a certain level below 50, it can be considered oversold, indicating a potential buy signal.

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How to Calculate

A traditional QQE is calculated by this process:

1. Calculate the RSI value for a given period (e.g., 14 periods).
2. Smooth the RSI value using an exponential moving average (EMA) over a specified number of periods (e.g., 5 periods).
3. Calculate the signal line by smoothing the smoothed RSI value using an EMA over a specified number of periods (e.g., 5 periods).
4. Plot the smoothed RSI value as the blue line and the signal line as the red line.