Trendflex and Reflex Indicators for Trend-Onset Trading

Summary

This article explains Reflex and Trendflex, two price indicators attributed to John Ehlers. Both first smooth prices with a SuperSmoother low-pass filter, then measure average distance between the smoothed price path and a reference line. The distance is normalized by an exponentially smoothed measure of its squared value. Reflex uses a line connecting the current price with the price from a chosen number of periods earlier. Trendflex instead uses the current price as its reference across the lookback, which tends to retain a stronger trend reading for longer.

The article proposes using new interval highs in Trendflex as long entries and new interval lows as short entries, with dynamic exits. It reports an illustrative futures test, but provides no detailed performance statistics, sample period, or comparison benchmark; the author describes the equity curve as unremarkable and the strategy as a starting point. Trendflex may lag more than Reflex, and the original indicator discussion does not prescribe trading rules. The proposed rules therefore need independent testing across markets and settings.

Key ideas

• Both indicators smooth prices before measuring their deviation from a reference line.
• Reflex connects the current price to its value from a selected lookback period.
• Trendflex uses the current price as a reference across the lookback and tends to retain trend readings longer.
• The article suggests trading interval extremes in Trendflex as trend initiation signals.
• Trendflex may lag, and the example test does not provide enough detail to assess robustness.

Tags

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