Main Features
QQE
Indicators
The QQE (Quantitative Qualitative Estimation) indicator is a technical analysis tool primarily used in trading to identify trends, momentum, and potential reversals. It’s essentially a modified version of the Relative Strength Index (RSI), with added smoothing and volatility tracking.
How It Works Internally
Step 1: Calculate RSI
Standard RSI over a period (e.g., 14).
Step 2: Smooth the RSI
Apply Wilder’s Smoothing or EMA to get a smoother RSI line.
This becomes the Fast QQE Line.
Step 3: Compute RSI-Based ATR
Instead of calculating ATR on price, QQE calculates ATR of the RSI values themselves.
This is called RSI_ATR or Smoothed True Range of RSI.
Step 4: Multiply RSI ATR by a Volatility Factor
Commonly a constant like 4.236 is used.
This gives you the "band distance" for the trailing line.
Step 5: Build the Trailing Line
The Trailing Line (Slow QQE Line) follows the Fast Line but stays behind it by that volatility-adjusted band.
When the Fast Line pulls back enough to cross this trailing line → signal generated.
📈 What This Achieves
When RSI moves rapidly, its ATR increases, so the trailing line adjusts dynamically, staying further away — avoiding false signals.
In quiet periods, ATR shrinks, so the trailing line tightens, making the system more responsive.
TWM
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QQE
Quantitative Qualitative Estimation
Description
🔧 Components of QQE:
- RSI Base:
- QQE starts with a standard RSI (typically 14-period).
- Smoothed RSI (Fast Line):
- The RSI is smoothed using a Wilder’s smoothing or EMA, producing a less noisy line.
- Trailing Line (Slow Line):
- A trailing version of the smoothed RSI, which acts like a dynamic threshold (similar to how ATR-based trailing stops work). It reacts to volatility using an internal ATR-based mechanism.
- Signal Generation:
- Buy Signal: When the Fast line crosses above the Slow line.
- Sell Signal: When the Fast line crosses below the Slow line.
⚙️ Parameters
Typical QQE settings include:
- RSI Period: 14
- Smoothing Factor: 5 to 14
- Volatility Factor: usually around 4.236 (used to multiply the ATR of RSI)
📈 How Traders Use It:
- Trend Following:
- Crosses between the fast and slow lines can indicate entry/exit points.
- Divergence:
- QQE can show divergence from price action, similar to RSI.
- Overbought/Oversold Zones:
- You can still use RSI levels (70/30) to gauge extremes, though QQE softens these due to smoothing.
✅ Pros:
- Filters out RSI noise
- Better for longer-term signals
- Tracks volatility automatically
❌ Cons:
- Laggy in fast markets due to smoothing
- Not suitable alone for scalping or low-timeframe decisions
RSI-Based Core
QQE builds on the Relative Strength Index (RSI), using it as the foundation to measure momentum and trend strength.
Double Smoothing
It applies Wilder’s smoothing twice — once on the RSI to reduce noise, and again on the trailing line — giving a smoother, more stable signal.
Volatility Tracking
QQE uses ATR (Average True Range) on the RSI to create a dynamic trailing line, making it responsive to market volatility.
Signal Line Crossovers
Buy/Sell signals are generated when the smoothed RSI (Fast Line) crosses the Volatility Trailing Line (Slow Line) — similar to a moving average crossover system.
Trend & Reversal Detection
QQE helps identify both trend continuation and reversal points by combining smoothed momentum with volatility filters — making it useful in both trending and ranging markets.
Similar extensions
TWM users have the opportunity to create their own strategies and indicators using the C# coding language.
