Ehlers Loops for Normalized Multi-Asset Price and Volume Cycles
Summary
This indicator maps normalized price and volume movements into a two-dimensional loop for several selectable symbols. It first applies a two-pole Butterworth high-pass filter to remove slower components, then a Super Smoother filter to reduce noise. Each filtered series is scaled by a smoothed estimate of its root mean square, allowing price and volume deviations to be compared in standardized units. The display draws recent paths for each symbol and can add a histogram showing their latest normalized price and volume readings.
The supplied explanation interprets combinations of rising or falling normalized price and volume as clues about demand, supply, or trend continuation. The default symbol set spans crypto assets and an equity index, while the inputs allow other symbols and filter periods. This is a visualization and interpretation aid rather than a complete trading system: it gives no entry, exit, risk, or backtest rules, and the stated demand and supply readings are qualitative heuristics rather than demonstrated predictive results.
Key ideas
- A high-pass filter and Super Smoother filter isolate and smooth cyclical price and volume changes.
- Smoothed root mean square scaling expresses both series as normalized deviations.
- The indicator plots price-volume loops for multiple selectable symbols and can show current readings in a histogram.
- Price and volume direction combinations are offered as qualitative interpretations, with no tested strategy rules or performance evidence.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.