Laguerre PPO Percentile Ranks for Price-Extreme Signals

Summary

This indicator seeks potential market tops and bottoms by comparing short and long Laguerre-smoothed price series. It calculates a percentage price oscillator from their difference, then ranks the current oscillator against its values over a rolling lookback window. Separate positive and negative percentile-rank readings are plotted, with threshold bands distinguishing extreme readings from warning zones. The supplied defaults use smoothing parameters of 0.4 and 0.8, a 200-bar lookback, and 90th- and 70th-percentile thresholds.

The method is an indicator construction, not a complete trading system: the document does not specify entry, exit, or position-sizing rules, nor does it provide performance tests. Extreme percentile readings may flag unusually stretched conditions, but they do not establish that a reversal will follow. The code is presented in a platform-specific form, and its usefulness depends on implementation details and market data. Treat the colors as visual categories for the ranked signals rather than evidence of predictive accuracy.

Key ideas

• The indicator smooths midpoint prices with short and long Laguerre filters.
• It forms a percentage price oscillator from the difference between the two smoothed series.
• Rolling percentile ranks identify unusually high or low oscillator readings.
• Separate warning and extreme thresholds classify the plotted top and bottom signals.
• The document provides no trading rules or evidence that the signals predict reversals.

Tags

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