Ehlers Simple Decycler for Low-Lag Trend Identification

Summary

The Simple Decycler adapts John Ehlers’s high-pass filtering method to identify broad price trends while reducing short-wavelength fluctuations. It calculates a high-pass filter from the price series and subtracts that output from price, leaving a smoothed low-frequency series that the document describes as having very little lag compared with basic moving-average smoothers.

Two percentage-offset lines around the Decycler create a hysteresis band for classifying market direction: prices above the upper line indicate an uptrend, prices below the lower line indicate a downtrend, and prices between them are treated as trend-neutral. The document provides indicator code with default settings, but gives no backtest, performance evidence, or guidance on choosing parameters. Its trend labels should therefore be understood as an indicator rule rather than evidence of a profitable trading strategy.

Key ideas

• The Decycler subtracts a high-pass-filter output from price to suppress short-wavelength fluctuations.
• The resulting series is intended to track low-frequency price movement with less lag than basic smoothers.
• Percentage-shifted upper and lower bands define uptrend, downtrend, and neutral zones.
• The document provides implementation settings but no performance tests or parameter-selection evidence.

Tags

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