Recursive Median Oscillator with Adaptive Floating Levels

Summary

The document describes a recursive median oscillator based on John Ehlers’s approach to filtering extreme price and volume observations. Median-based recursive filtering is presented as a way to reduce the influence of outliers while smoothing market data with relatively little lag. The oscillator is compared conceptually with RSI, though no formulas or comparative test results are supplied.

The original signal idea is to watch crossings of the zero line. This version adds floating outer and middle levels, making its signals adaptive, and offers color changes based on the oscillator’s slope or its crossings of those levels. It uses the original default parameters, while suggesting that longer high-pass periods may be worth exploring. The document gives no charts, backtest, market specification, or evidence that one trigger setting performs better, so these are indicator usage suggestions rather than validated trading rules.

Key ideas

• Recursive median filtering is intended to reduce the effect of extreme observations in price and volume data.
• The oscillator is described as a low-lag alternative for viewing underlying market movement.
• The original signal convention uses crossings of the zero line.
• Floating outer and middle levels provide adaptive crossing signals and color-change options.
• Longer high-pass periods are suggested for experimentation, without comparative performance evidence.

Tags

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