PipTick Effort Index indicator is based on the work of Karthik Marar, volume spread analysis trader. It compares the price change (Result) to the size of the volume (Effort) for a certain period. By comparing the effort and result we can get more information about the future price movement. Both values are normalized and converted to a scale of 0 – 100 % based on a selectable look-back period.
The law of effort vs. result states that the change in the price of a trading vehicle is the result of an effort expressed by the level of volume and that harmony between effort and result promotes further price movement while lack of harmony promotes a change in direction.