Ehlers Laguerre Filter Indicator

Ehlers Laguerre Filter Indicator

Ehlers Laguerre filter indicator for MT5. Trend reversal indicator. Forex crossover indicator. Trend following indicator.

The Ehlers Laguerre Filter Indicator for MetaTrader is a forex technical indicator developed based on one of John Ehlers’ trading strategies. The indicator helps demystify and removes the need to understand the unpopular concept of the gamma parameter, as explained by John Ehlers.

This MT5 indicator looks like a moving average, but it’s not. The Ehlers Laguerre filter indicator has smoothing functions, which reduces the likelihood of it lagging behind the price. The indicator may look simple on the chart, but it can effectively filter and determine the market trend. This, in turn, helps you easily identify market bias and make informed trading decisions.

The indicator can be very handy for scalping a few pips away from the market. It is also great for day and swing trading. Also, novice traders can easily use and benefit from this trading tool as it is not that complicated on the chart. On the other hand, experienced traders can use it as a confluence for their analysis.

Ehlers Laguerre Filter Indicator BUY/SELL Signals

The picture above shows how the Ehlers Laguerre filter indicator would look on your MT5 chart. The figure also illustrates how the BUY/SELL setups were generated.

The Ehlers Laguerre filter indicator has a signal line for BUY and SELL trading signals. It suggests a possible bullish trend when the price is above the signal line of the indicator. Conversely, a bearish trend is depicted when the price crosses the signal line below. For addition the indicator shows an MA line that changes its color when crossover the main signal line.

However, the indicator is recommended to be used in conjunction with other trading indicators for better entry/exit trades. In addition, you can also use it along with price action, which is even better. Suffice it to say that the above signals were generated by the indicator in sync with the price action.

BUY setup: first wait until the price is above the signal line of the indicator, then open a BUY/LONG position after the price also confirms the upward movement. In the example above, the price was already above the signal line, but at this point it would not be reasonable to enter a BUY. You need to wait for price action to confirm the setup (like a bullish engulfing candle) before opening a BUY entry.

Setting SALE. The same principle as for the BUY setting described above also applies to the SELL setting. First, wait until the price drops below the signal line. Open a SELL/SHORT entry after price action confirmation.

Take profit and stop loss are set by each trader at their own discretion. So make sure they are realistic. In addition, you can also track your profit when a trade moves in your favor. However, trailing returns have their pros and cons.

Conclusion
The Ehlers Laguerre Filter Indicator for MT5 is a great trading tool that can potentially improve your trading. It is convenient for charts and does not interfere with the candlesticks on your chart. Finally, the indicator is free to download.