Ehlers Filter is a powerful trend-following VertexFX indicator, which provides precise BUY and SELL signals.
This indicator has a minimal lag, of approximately 4 bars, which is very useful in detecting start of trends.
In the first step we calculate the distance co-efficient, which is the absolute difference between the current price and price MOM_PERIOD bars ago. This difference is then price-weighted over the LENGTH bars, that is, multiplied by the price, thus providing us with the LENGTH bars WMA. It is similar to an EMA, but is faster with lesser lag and better response to change in trends.
It provides excellent entries when the signal-to-noise ratio (using the Signal Noise Ratio indicator) is high, implying that the whipsaws are lesser.
BUY - Enter BUY trade when indicator color turns BLUE. Exits BUY when indicator color turns RED.
SELL - Enter SELL trade when indicator color turns RED. Exits SELL when indicator color turns BLUE.
This indicator has a minimal lag, of approximately 4 bars, which is very useful in detecting start of trends.
In the first step we calculate the distance co-efficient, which is the absolute difference between the current price and price MOM_PERIOD bars ago. This difference is then price-weighted over the LENGTH bars, that is, multiplied by the price, thus providing us with the LENGTH bars WMA. It is similar to an EMA, but is faster with lesser lag and better response to change in trends.
It provides excellent entries when the signal-to-noise ratio (using the Signal Noise Ratio indicator) is high, implying that the whipsaws are lesser.
BUY - Enter BUY trade when indicator color turns BLUE. Exits BUY when indicator color turns RED.
SELL - Enter SELL trade when indicator color turns RED. Exits SELL when indicator color turns BLUE.