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# ER: Efficiency Ratio
> "The best trades move in a straight line. The worst ones wander. ER tells you which kind you're looking at." -- Perry Kaufman
| Property | Value |
| ---------------- | -------------------------------- |
| **Category** | Oscillator |
| **Inputs** | Source (close) |
| **Parameters** | `period` (default 10) |
| **Outputs** | Single series (Efficiency Ratio) |
| **Output range** | $0$ to $1$ |
| **Warmup** | `period + 1` bars |
### TL;DR
| Property | Value |
|----------|-------|
| **Category** | Oscillator |
| **Inputs** | Source (close) |
| **Parameters** | `period` (default 10) |
| **Outputs** | Single series (Efficiency Ratio) |
| **Output range** | $0$ to $1$ |
| **Warmup** | `period + 1` bars |
### Key takeaways
- Measures the signal-to-noise ratio of price movement: net directional change divided by total path length.
- Output of $1.0$ means price moved in a perfectly straight line (pure trend). Output of $0.0$ means all movement cancelled out (pure noise).
- Core component of Kaufman's Adaptive Moving Average (KAMA), where ER dynamically adjusts the smoothing constant.
- Uses dual circular buffers with a running noise sum for O(1) per-bar updates.
- ER measures the signal-to-noise ratio of price movement: net directional change divided by total path length.
- Clamped to $[0, 1]$; division by zero (zero noise) returns $0$.
- Output of $1.0$ means price moved in a perfectly straight line (pure trend). Output of $0.0$ means all movement cancelled out (pure noise).
- It is core component of KAMA (Kaufman's Adaptive Moving Average), where ER dynamically adjusts the smoothing constant.
- Not available and therefore not validated against any other TA library
> "The best trades move in a straight line. The worst ones wander. ER tells you which kind you're looking at." -- Perry Kaufman
## Historical Context
Perry Kaufman introduced the Efficiency Ratio in *Trading Systems and Methods* (1995) as part of his Adaptive Moving Average (KAMA) framework. The idea was straightforward: an ideal trend indicator should react quickly in trending markets and slowly in choppy ones. ER provides the adaptive signal that tells KAMA how to behave.