QQE (Quantitative Qualitative Estimation): a smoothed RSI with a volatility-based trailing line
QQE, short for Quantitative Qualitative Estimation, starts from a smoothed RSI and adds a second line that trails it at a distance set by how much the smoothed RSI itself has been moving. The signal comes from how those two lines interact, not from fixed overbought and oversold zones. Its origins are not well documented, so this page follows a widely used public version and explains how futures traders read it and how a strategy generator can test it on your own contracts.
What it measures
QQE is a momentum indicator built in layers on top of the Relative Strength Index. The first layer is RSI with an extra round of smoothing, which removes much of the bar-to-bar jitter a raw RSI shows. The second layer is a trailing line that follows the smoothed RSI the way a trailing stop follows price. What a trader reads is the relationship between the two: which line is on top, how far apart they are, and when one crosses the other.
A widely used public version is calculated in four steps. First, it computes an ordinary RSI over the chosen lookback and passes it through a short exponential moving average; that smoothed result is the main QQE line. Second, it measures how far the main line moved from one bar to the next, ignoring direction, and averages those moves twice to get a steady estimate of how volatile the smoothed RSI has been. Third, it scales that volatility estimate by a fixed factor to set a band distance. Finally, it places the trailing line one band distance below the main line while the main line sits above it, and lets that trailing level only rise; when the main line falls through it, the trailing line jumps to the other side, sits one band distance above, and from then on can only fall. The idea mirrors the way ATR spaces a volatility stop away from price, except that here the thing being trailed is momentum rather than price.
Because the trailing line is spaced by the smoothed RSI's own recent volatility, its distance adapts. When momentum has been swinging hard, the band widens and the trailing line keeps more room; when momentum has been calm, the band tightens and the trailing line hugs the main line. The result reads like a Supertrend drawn on an oscillator instead of on the price chart: a simple statement that momentum has either held its side of the trailing line or broken through it.
How it behaves in real markets
In a steady trend the main line stays on one side of the trailing line for long stretches. The trailing line ratchets along behind it, step by step, and every shallow pullback in momentum that stops short of the trailing line leaves the reading intact. This is where QQE earns its place: it lets a momentum view persist through the small dips that would push a raw RSI back across its midline.
Choosing the indicator period is a trade between speed and stability. A shorter period makes the underlying RSI react faster, so the main line swings more and meets the trailing line more often: earlier signals, but more crossings that reverse within a few bars. A longer period gives a calmer main line, fewer flips and later turns. In public versions that also expose the smoothing and the band factor, the same logic applies: more smoothing delays the main line, and a wider factor keeps the trailing line further away so that only larger momentum breaks register. Rather than settling on one choice by eye, it is more reliable to check which settings keep similar behaviour across different stretches of history.
The classic misuse is reading QQE as if it were a plain RSI with the familiar overbought and oversold thresholds. The main line is smoothed, so it reaches those extremes less often and later than raw RSI does, and a strong trend can carry it into an extreme zone and hold it there. Fading every visit to an extreme ignores the part of the indicator that carries the information: whether the main line is still holding its side of the trailing line. A related mistake is treating every cross as equal. In a flat, choppy market the band contracts, the two lines braid together and crosses arrive in quick succession; that pattern signals indecision, not a run of fresh opportunities.
Common ways to use it (concepts)
Main line through the trailing line
A long idea triggers when the smoothed RSI crosses above the trailing line, and a short idea when it crosses below. Because the trailing line only gives way after a move larger than recent momentum noise, the cross marks a real change of side rather than a small wobble.
Which side is in control
Allow long trades only while the main line stays above the trailing line, and short trades only while it stays below. The actual entry comes from a separate rule, such as a breakout or a pullback to a moving average.
Cross plus the RSI centre
Require the main line to sit above the RSI midline for longs and below it for shorts, in addition to the cross. This screens out crosses that happen while momentum is still on the wrong half of the scale, and it suits contracts that trend in long, persistent legs.
Pairing it with other indicator families
QQE answers one question well: has momentum held or broken its side of a volatility-adjusted line? It does not say whether the market is trending at all. Pairing it with ADX lets a rule accept QQE crosses when trend strength is rising and set them aside when the market drifts sideways, which is exactly when the two lines tend to braid.
For context on the price chart, ATR helps size stops and targets for a QQE entry, since the indicator itself lives on the RSI scale and says nothing about how many points a typical move covers. A price-based trailing tool such as Supertrend makes a natural cross-check: when the price trail and the momentum trail agree, the trade has two different kinds of support.
Stacking QQE with another RSI-derived oscillator adds less than it seems, because they share the same foundation. A better partner is something built differently: the MACD reads momentum from the gap between moving averages of price, and the Choppiness Index says whether the market is orderly enough for a trailing-line method to work.
In AlphaPrime
In AlphaPrime, QQE is one of the built-in momentum families the strategy generator draws from, listed under its own name in the building-block catalogue. It exposes the two lines described above: QQE line one, the smoothed RSI, and QQE line two, the trailing line. The input you can adjust is the indicator period; conditions that compare a line with a level also take a threshold, and each condition carries a current-bar shift so a rule can read the value a few bars back.
The condition types follow the two-line design. Line one crosses above line two or crosses below line two; it is above line two or below line two; it crosses above the level or is above the level, with the matching downward versions; it is rising or falling, turns up or turns down; and line two itself can be required to be rising or falling. The generator uses these as entry, exit or filter rules and crosses them with trend, volatility, volume and session families.
The candidates are backtested on the GPU in parallel, and you can set out-of-sample validation thresholds, so you keep only QQE rules that still hold up on data they have never seen. Combinations that pass can be exported as strategy code for trading platforms, where you can continue testing them in simulation before live use.
FAQ
Why not read QQE with the classic RSI overbought and oversold levels?
The main QQE line is a smoothed RSI, so it reaches those zones less often and stays there longer in a trend. The more useful reading is where the main line sits relative to the trailing line, with the RSI midline as a secondary check.
How should I choose the QQE period?
A shorter period speeds up the underlying RSI and produces more crossings, many of them short-lived; a longer one is smoother and slower to turn. Compare several settings across different market phases and keep the ones whose behaviour stays similar out of sample, rather than the one that looks best on a single stretch.
How is QQE different from RSI?
QQE starts from RSI but adds smoothing and a trailing line whose distance comes from the smoothed RSI's own volatility. RSI is usually read against fixed zones; QQE is read as the interplay between two lines.