John Ehlers’ MADH Oscillator with Hann-Windowed Filters

Summary

The document describes John Ehlers’ MADH oscillator, an extension of the moving average difference indicator intended to improve cycle and trend analysis. It forms two price filters with different lengths, applies Hann-window weighting to their inputs, and calculates their difference as a percentage of the longer filter. The example uses a short length of 8 and a dominant-cycle value of 27; the longer length is derived from those settings.

The source presents indicator valleys as potential buy indications and peaks as potential sell indications, and positions MADH as an enhancement to the earlier MAD oscillator. It supplies an implementation example but no chart, market, test period, benchmark, or quantified performance evidence. Peak-and-valley interpretation is therefore a suggested use, not a demonstrated trading edge. The indicator’s behavior will depend on parameter choices and price data, and the document does not specify confirmation rules, risk controls, or how to handle whipsaws.

Key ideas

• MADH compares two differently sized price filters and expresses their difference relative to the longer filter.
• Hann-window weights are used to build the filters from recent closing prices.
• The example derives the longer filter length from the short length and a dominant-cycle setting.
• The article interprets indicator valleys as possible buy points and peaks as possible sell points.
• No backtest or quantified performance evidence is provided.

Tags

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