A Nonlinear Ehlers Filter for Trend Direction

Summary

This indicator applies a nonlinear weighting scheme to an Ehlers-style filter to track a common price trend. It is intended to signal trend direction for entries and exits, with the source claiming less delay than a linear Ehlers filter. The user can adjust the calculation period, momentum lookback, and applied price.

The calculation squares the difference between the current applied price and its value at the momentum lookback. That value weights the price in a numerator, while the denominator sums the weights; the resulting ratio is presented as the filtered price. The document gives a formula and parameter descriptions, but no chart examples, performance tests, or rules for turning filter changes into trades. Its reduced-lag and improved timing statements are not supported with evidence, and indicator behavior may depend on parameter choices and market conditions.

Key ideas

• The filter weights prices using the squared change over a configurable momentum lookback.
• Its output divides the weighted price average by the average weight.
• The adjustable inputs are period, momentum, and applied price.
• The document claims lower delay than a linear filter but provides no supporting tests or results.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.