Laguerre RSI: A Smoothed Oscillator and 20/80 Signals

Summary

The document presents a Laguerre-filter version of the relative strength index, intended to reduce noise compared with a conventional RSI. It recursively smooths the selected price series through four filter stages, then compares upward and downward movements between those stages to form an oscillator scaled from 0 to 100. The alpha setting adjusts the balance between lag and smoothness.

The indicator marks 20 and 80 as reference levels and provides alerts when the oscillator crosses above 20 or below 80. The accompanying guidance treats those crossings as buy and sell signals, respectively, while sustained readings above 80 or below 20 are described as signs of strong uptrends or downtrends. The document provides the indicator logic and usage description, but no performance testing or evidence that the signals are profitable. The threshold interpretations are therefore guidance to evaluate, not validated trading results.

Key ideas

• The indicator applies a four-stage Laguerre filter to a selected price source before calculating its oscillator.
• The alpha coefficient controls the trade-off between smoothing and lag.
• The oscillator uses 20 and 80 as reference levels for crossover alerts.
• The document interprets persistent extreme readings as signs of trend strength but gives no performance evidence.

Tags

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