MADH: A Hann-Filtered Moving Average Difference Oscillator

Summary

The MADH indicator enhances a moving average difference oscillator with two Hann-windowed finite impulse response filters. It applies a shorter and a longer weighted filter to the chosen price source, then expresses their difference relative to the longer filter as a percentage. The result oscillates around zero and is intended to provide a smoother view of price movement than a basic moving average difference.

Users can adjust the source, short length, and dominant-cycle input, which helps determine the longer filter length. The displayed color can reflect whether the oscillator is above or below zero, or whether it is rising or falling. The document relates the method to John Ehlers's enhanced MAD indicator and notes that the provided calculation is optimized for Pine while producing the same results as the original formula. It explains the construction and visual interpretation, but offers no trading rules, market tests, or performance evidence; the dominant-cycle input is described as a placeholder for possible adaptive control.

Key ideas

• MADH compares two Hann-windowed FIR filters with different observation lengths.
• It scales the difference between the short and long filtered prices by the long filter value.
• The zero line shows the oscillator's sign, while an alternative coloring scheme indicates its direction of change.
• The dominant-cycle input helps determine the longer filter length but is not described as an adaptive mechanism.
• The document explains indicator construction without presenting a trading system or performance tests.

Tags

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