[blackcat] L2 Ehlers Decycler Oscillator

31 oct. 2020

Level: 2

Background

John F. Ehlers introuced Decycler Oscillator in his "Cycle Analytics for Traders" chapter 4 on 2004.


Function

A decycler oscillator is created by subtracting the output of a high-pass filter having a shorter cutoff period from the output of another high-pass filter having a longer cutoff period. This way, both elements have a zero in their transfer responses at zero frequency. Thus, the very, very long cycle components (and the static term) are removed. There is a finite difference between the output of the two filters in the frequency range between their cutoff periods, but shorter cycle components are still removed by cancellation. As a result, the trend line is displayed as an oscillator.

Key Signal

Decycler ---> Decycler Oscillator fast line
Trigger ---> Decycler Oscillator slow line


Pros and Cons

100% John F. Ehlers definition translation of original work, even variable names are the same. This help readers who would like to use pine to read his book. If you had read his works, then you will be quite familiar with my code style.

Remarks

The 37th script for Blackcat1402 John F. Ehlers Week publication.

Readme

In real life, I am a prolific inventor. I have successfully applied for more than 60 international and regional patents in the past 12 years. But in the past two years or so, I have tried to transfer my creativity to the development of trading strategies. Tradingview is the ideal platform for me. I am selecting and contributing some of the hundreds of scripts to publish in Tradingview community. Welcome everyone to interact with me to discuss these interesting pine scripts.

The scripts posted are categorized into 5 levels according to my efforts or manhours put into these works.

Level 1 : interesting script snippets or distinctive improvement from classic indicators or strategy. Level 1 scripts can usually appear in more complex indicators as a function module or element.

Level 2 : composite indicator/strategy. By selecting or combining several independent or dependent functions or sub indicators in proper way, the composite script exhibits a resonance phenomenon which can filter out noise or fake trading signal to enhance trading confidence level.

Level 3 : comprehensive indicator/strategy. They are simple trading systems based on my strategies. They are commonly containing several or all of entry signal, close signal, stop loss, take profit, re-entry, risk management, and position sizing techniques. Even some interesting fundamental and mass psychological aspects are incorporated.

Level 4 : script snippets or functions that do not disclose source code. Interesting element that can reveal market laws and work as raw material for indicators and strategies. If you find Level 1~2 scripts are helpful, Level 4 is a private version that took me far more efforts to develop.

Level 5 : indicator/strategy that do not disclose source code. private version of Level 3 script with my accumulated script processing skills or a large number of custom functions. I had a private function library built in past two years. Level 5 scripts use many of them to achieve private trading strategy.