Ehler Laguerre RSI Technical Analysis and Ehlers RSI Signals
Created by John Ehler.
Originally used to trade stock and commodities.
Ehler RSI indicator uses a 4 Element Laguerre filter to provide a "time distort" such that low frequency components i.e. price spikes are delayed much more than the higher frequency components. This technical indicator enables more smoother filters to be developed using short amounts of data.
The Ehlers RSI uses a scale of 0- 100, the center line is used to generate signals and the 80/20 levels represents overbought-over-sold areas.
The only parameter which can be optimized for this technical indicator is damping gamma factor, generally 0.5 to 0.85, to best suit your trading method.
Ehlers Laguerre Relative Strength Index
Technical Analysis and How to Generate Trading Signals
This implementation of the Laguerre RSI uses scale of 0 - 100.
Gold Cross-over Signals
Buy Signal- A buy signal is generated/derived when Ehler RSI crosses above the 50 level Mark.
Sell Trading Signal- A sell signal is generated/derived when the Ehlers RSI crosses below the 50 level and center Mark.
Oversold/Overbought Levels in Indicator
Oversold/Over-bought Levels in Trading Indicator
A typical use of the Laguerre RSI is to buy after it crosses back above the 20% level and sell after it crosses back below the 80% level.
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