In this article we are going to present a technical indicator designed for the Metatrader 4 platform which displays the QQE (Quantitative Qualitative Estimation) indicator below the price chart of any trading instrument that we are analyzing, be it a currency pair, a precious metal, an index or a stock.
At the end of this article, you will be able to download the indicator at no cost.
What is the QQE indicator?
The QQE indicator belongs to a class of rare algorithms that have performed well in any instrument or market in which it has been used for decades. It is not difficult to guess that QQE is an abbreviation, and that the full name of this indicator is Quantitative Qualitative Estimation.
The point is that the first version of this indicator was written in 2008, that is, before the global financial crisis. In the next five years, when the volatility of the Forex market increased, many trading strategies stopped working, but not the QQE indicator. Therefore, the algorithm has passed the stress test successfully.
We will not go into details regarding the calculation of this indicator, which is quite complex compared to other technical tools. You can find a full QQE review in the following article: QQE Technical Indicator
However, let’s talk a bit about its characteristics and trading signals.
The QQE consists of a smoothed version of the RSI indicator (Relative Strength Index) based on which two dynamic levels based on volatility are calculated, called Fast Trailing Level and Slow Trailing Level, using the ATR indicator. These three lines are displayed together in a window below the price chart, as seen in the following images.
The QQE indicator rarely generates false trading signals and has practically no lag, making it little vulnerable both during periods of higher volatility and during sideway markets. Longer time frames deserve special attention, as this tool helps to quickly spot the strongest trends.
The QQE can be used in the following ways:
- As an indicator of the market trend direction.
- To identify assets that are overbought and oversold.
- To find divergences between the price and the indicator.
- Buy and sell signals by crosses of the level 50 in the indicator.
- Bullish and bearish crosses of the indicator lines.
One of the vital parameters used in the QQE indicator is the Smoothing Factor (SF), which is essentially the period of the moving average that is displayed in the indicator window when smoothing the RSI indicator.
After having explained in a basic way what is the QQE indicator and what it is used for, we are going to present a version of this technical indicator developed for Metatrader 4.
QQE Indicator for Metatrader 4
As with other technical tools, there are different versions of the QQE indicator developed for Metatrader 4 by different programmers. Some of these versions even show the trading signals generated by the QQE. Next we are going to present and explain a simple version of this indicator, which displays the QQE in its standard form with its three lines in different colors, in a window below the price chart.
However, we also include other versions in the download file, including a version for Metatrader 5 and another that displays the indicator in the form of a histogram along with bullish and bearish signals that indicate buy and sell signals from the QQE.
The modified indicator in question is named QualitativeQuantitativeEstimation.mq4. When used with its default configuration in any price chart, the indicator displays a window like the one shown in the following image:
In this case, the indicator was applied on a 1-hour (H1) price chart of the USD/JPY currency pair. As you can see, it shows the three lines that make up the QQE in different colors: QQE (green line), Fast TL (red line) and Slow TL (blue line).
Based on the different readings that the indicator gives us and the crosses that occur between its lines, we can obtain different interpretations of the market behavior and bullish and bearish signals (see previous section).
As we already indicated, this is a modified indicator that shows the QQE in its standard form, without major changes. However, we can modify different parameters of the indicator, as well as the characteristics of its lines (color, thickness, etc.). The following image shows the QualitativeQuantitativeEstimation.mq4 configuration window:
The parameters of the QualitativeQuantitativeEstimation.mq4 indicator are limited only to those used by traditional QQE:
- RSI_Period: Period of the RSI oscillator used as the basis for the QQE calculation.
- RSI_Smoothing_Period: Period of the moving average used in the smoothing of the RSI.
- ATR_Period: ATR period used in the QQE calculation.
- Fast_ATR_Multipliers: Multiplier used for the calculation of the Fast TL line.
- Slow_ATR_Multipliers: Multiplier used for the calculation of the Slow TL line.
It is best to leave the indicator in its standard configuration unless you are well acquainted with the features of the QQE indicator and its uses.
In the following window you can modify the colors and other characteristics of the QQE lines:
As for the version of the QQE indicator that shows a histogram and trading signals alerts generated by the QQE and its various lines, it looks as follows when applied to a chart:
This indicator is among the download files included below.
Download the QQE Indicator For MT4
You can download various versions of the Quantitative Qualitative Estimation indicator for MT4 and MT5, including those explained above, at the following link:
How to install QQE indicator in Metatrader 4?
- Download the mq4 file.
- Copy the mq4 file to Metatrader/MQL4/Indicators /directory
- Start or restart the Metatrader 4 platform.
- Select the chart and time frame where you want to test the QQE indicator.
- Find the QualitativeQuantitativeEstimation indicator under “Custom Indicators” located on the Metatrader 4 toolbar.
- Click where it says “QualitativeQuantitativeEstimation”.
- Modify the indicator settings or click “OK“
- The QQE indicator is now displayed below your price chart.
