The TPR indicator is inherently a volatility-based trend-following indicator.
Under the same timeframe, a smaller factor makes the TPR closer to price, more sensitive, and more prone to flipping between long and short trend.
A larger factor causes the TPR to be farther from price, less reactive, and less likely to reverse—making it behave more like a “trend-following line with a wide stop-loss”.
As shown in the charts below—both chart 1 and chart 2 contain four charts each, all using the same timeframe (resulting in eight charts with different Factor parameters)—we can clearly observe the significant differences in the TPR indicator’s behavior when its Period input is fixed at 10 while the Factor parameter varies.
1. The Intuitive Differences Shown by Different Factor Parameters
We can think of Factor changes as “adjusting the distance between the indicator and the price.”
Very Small Factor (0.1, 0.3) — Highly Responsive, Frequent Reversals
At Factor 0.1 and 0.3, the indicator’s red/green dots stay extremely close to the candlesticks (price).
Behavior:
Even a slight pullback causes the indicator to immediately change color (bullish to bearish or vice versa).
Result:
The chart shows extremely frequent buy/sell signals (color flips). The trend line looks very fragmented with almost no ability to filter market noise.
Factor = 0.1 (Top Left)
- The green/red dots almost cling tightly to the candles.
- With any small retracement or bounce, the line “tightens” upward or downward.
- Even a minor counter-move easily touches the line and triggers a flip.
➜ Performance: Extremely sensitive, very tight stops, many signals, easily shaken out in choppy markets.
Factor = 0.3 (Top Right)
- Still close to price, but slightly smoother than 0.1.
- A pullback won’t trigger a reversal immediately; needs a bigger counter-move.
➜ Still sensitive, but slightly more noise-resistant than 0.1.
Medium Factor (0.6, 0.9) — Moderate Distance, Noise Filtering
As Factor increases to 0.6 and 0.9, the indicator pulls further away from price.
Behavior:
Small price fluctuations no longer cause the indicator to change colors easily. Clear “trend segments” start forming.
Result:
Signal frequency decreases, it filters minor consolidation noise, and better captures short-term swing trends.
Factor = 0.6 (Bottom Left)
- A clearly larger distance between dots and price.
- During uptrends, the TPR forms a more stable, step-like rising line.
- Only significant reversals can touch and flip it.
➜ Starts to resemble a medium-term trend line, filtering some short-term noise.
Factor = 0.9 (Bottom Right)
- TPR stays even farther from price, often forming long smooth horizontal steps.
- Even if price drops after topping out, TPR remains unchanged until the decline is large enough.
➜ High inertia but effective in capturing bigger trends, avoiding frequent whipsaws, at the cost of more lag.
Large Factor (1.2, 1.5, 1.8, 2.0) — Wide Stop, Long-Term Trend Tracking
When Factor > 1.0, the indicator stays very far from price.
Behavior:
TPR forms distinct step-like structures, staying flat for long periods. Only strong reversals can flip the line.
Result:
Signals become extremely rare. It allows deep pullbacks within a trend without exiting, suitable for capturing long-cycle directional moves.
As Factor increases from 1.2 → 2.0, you can observe:
- Greater vertical spacing between dots and price
- Looser, longer steps
- Many small consolidations or pullbacks stay within the TPR “band,” not triggering reversals
- Only strong directional moves that truly break through this “bandwidth” cause a flip
➜ The larger the Factor, the more it behaves like a wide protective band, flipping only during major swing reversals.
2. Summary of How Factor Affects the TPR Indicator
The Factor parameter acts like a volatility multiplier (similar to ATR multipliers). It mainly influences three aspects:
A. Sensitivity vs. Lag
- Smaller Factor → higher sensitivity:
Responds quickly to price changes, allowing early entries/exits, but easily whipsawed. - Larger Factor → more lag:
Ignores short-term noise and avoids shakeouts, but trend-end signals come late, leading to greater profit give-back.
B. Stop Loss Tightness
- Small Factor = tight stop:
Line stays close to price. Lower risk but easy to get stopped out. - Large Factor = wide stop:
Gives the market more breathing room, allowing deeper trend-aligned pullbacks.
C. Noise Filtering
From factor 0.1 (chart 1) to factor 2.0 (chart 2), there is a clear noise-reduction progression:
- Small factor: treats most price movements as signals → lots of noise.
- Large factor: filters most fluctuations → fewer but more reliable signals.
Factor Range Overview
Small Factor (0.1 ~ 0.3)
- Very close to price
- Tight stops, close tracking
- Best for: scalping, short-term trading, traders who can tolerate many false signals
Medium Factor (0.6 ~ 0.9)
- Moderate distance
- Balances trend-following and noise reduction
- Best for: swing trading, capturing trend segments without excessive lag
Large Factor (≥1.2 up to 2.0)
- Far from price
- Slow to change
- Best for: medium/long-term trend following, wide stop strategy, not suitable for short-term entries/exits
Conclusion
In the TPR indicator, the Factor parameter determines the trading style:
- Small Factor: good for scalping or ultra-short-term trading
(fast reactions, frequent signals, high sensitivity) - Large Factor: good for swing or trend trading
(captures big waves, avoids noise, accepts larger drawdowns)