Ehlers Laguerre RSI Indices Technical Analysis and Ehlers RSI Indices Trading Signals

Developed by John Ehlers.

Originally used to trade stocks and commodities.

Ehlers RSI uses a 4-Element Laguerre filter to provide a "time distort" such that the low frequency components/ stock indices price spikes are delayed much more than the higher frequency components. This stock indices indicator enables much smoother filters to be created using short amounts of data.

The Ehlers RSI uses a scale of 0- 100, the center line is used to generate stock indices signals and the 80/20 levels represents overbought/oversold levels.

The only parameter that can be optimized for this indicator is a damping gamma factor, usually 0.5 to 0.85, to best suit your trading method.

Ehlers Laguerre Relative Strength Index

Indices Technical Analysis and Generating Indices Trading Signals

This implementation of the Laguerre RSI uses scale of 0-100.

Crossover Signals

Buy signal- A buy stock indices signal is generated when the Ehlers RSI crosses above the 50 level Mark.

Sell signal- A sell stock indices signal is generated when the Ehlers RSI crosses below the 50 level Mark.

Oversold/Overbought Levels

Oversold/Overbought Levels

A typical use of the Laguerre RSI is to buy after it crosses back above the 20% level and sell after it crosses back below the 80% level.