[blackcat] L2 Ehlers Instantaneous Trendline Trading Strategy

27 de out. de 2020

Level: 2

Background

John F. Ehlers introuced Instantaneous Trendline Trading Strategy in his "Cybernetic Analysis for Stocks and Futures" chapter 3 on 2004.


Function

With the crossover strategy that Dr. Ehlers has developed it is possible to be on the wrong side of the trade for a substantial period from time to time. For this reason, Dr. Ehlers has added a rule that if the price goes against your position by more than some percentage, the strategy will correct itself and automatically reverse to the opposite position. The percentage is supplied as the input variable RevPct. RevPct is an optimizable parameter, but I find that the default
value of 1.5 percent (RevPct = 1.015) is a relatively robust number.



Key Signal

Trigger ---> Instantaneous Trendline fast line
ITrend ---> Instantaneous Trendline slow line
LimitBuy ---> limit buy price level which is triggered by gold cross
LimitSell ---> limit buy price level wich is triggered by dead cross

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 23th 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.

há 4 dias

Notas de Lançamento

OVERVIEW

This indicator implements the Ehlers Instantaneous Trendline (EIT) trading strategy, providing visual trend identification and trade signals based on price action analysis.

FEATURES

• Calculates the Instantaneous Trendline using Ehlers' proprietary algorithm
• Generates buy/sell signals through trend crossovers
• Displays dynamic trend trigger and instantaneous trend lines
• Visualizes trade opportunities with labeled signals
• Customizable parameters for source price, alpha, range fraction, and reversal percentage

HOW TO USE

Add the indicator to your chart
Adjust input parameters as needed: • Source Price: Select the price series to analyze • Alpha: Controls smoothing factor (default: 0.07) • Range Fraction: Determines signal sensitivity (default: 0.35) • Reversal Percentage: Sets reversal threshold (default: 1.015)
Monitor crossover points between trend lines for trading signals
Look for BUY labels when trend crosses upward
Watch for SELL labels when trend crosses downward

LIMITATIONS

• Performance may vary across different market conditions
• Requires sufficient historical data for accurate calculations
• Parameters need optimization for specific markets and timeframes

NOTES

• The indicator uses the Ehlers algorithm for trend detection
• Trade signals are generated through trend line crossovers
• Color-coded visualization helps identify trend direction
• Labels provide clear entry/exit signals