V.6:7 (250-252): Moving averages Part 2 Ehlers Leading Indicator (ELI) by John Ehlers
Product Description
Moving averages
Part 2 Ehlers Leading Indicator (ELI)
by John Ehlers
Most technical indicators use a moving average of some kind, and this usually dooms the indicator to lag price. Some indicators use momentum, or rate of change, to generate a leading function. However, this is similar to taking the derivative of a continuous function, and it results in a very noisy signal. The noise is usually reduced by smoothing or averaging. This averaging delays the indicator so that, at best, it runs even with price, without lag or lead.
I have developed a new indicator that provides leading signals when cycles are present in the data. This indicator uses only exponential moving averages (EMA), which I described and compared to simple moving averages in Part 1 (see S&C, June 1988). The indicator's parameters may be optimized so you can use it in a turnkey fashion. If you want to examine these parameters in greater detail, a source listing in PC BASIC is provided in Figure 5.
I modestly refer to this new indicator as ELI, the Ehlers Leading Indicator.
Most technical indicators use a moving average of some kind, and this usually dooms the indicator to lag price. Some indicators use momentum, or rate of change, to generate a leading function. However, this is similar to taking the derivative of a continuous function, and it results in a very noisy signal. The noise is usually reduced by smoothing or averaging. This averaging delays the indicator so that, at best, it runs even with price, without lag or lead.
I have developed a new indicator that provides leading signals when cycles are present in the data. This indicator uses only exponential moving averages (EMA), which I described and compared to simple moving averages in Part 1 (see S&C, June 1988). The indicator's parameters may be optimized so you can use it in a turnkey fashion. If you want to examine these parameters in greater detail, a source listing in PC BASIC is provided in Figure 5.
I modestly refer to this new indicator as ELI, the Ehlers Leading Indicator.
FOR THOSE ORDERING ARTICLES SEPARATELY:
*Note: $2.95-$5.95 Articles are in PDF format only. No hard copy of the article(s) will be delivered. During checkout, click the "Download Now" button to immediately receive your article(s) purchase. STOCKS & COMMODITIES magazine is delivered via mail. After paying for your subscription at store.traders.com users can view the S&C Digital Edition in the subscriber's section on Traders.com.
| Take Control of Your Trading. |
| Professional Traders' Starter Kit |
| All these items shown below only $299.99! |
| Click Here to Order |