Laguerre PlusDi_v2
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This tool is designed to help traders visualize and analyze market momentum by combining two distinct types of technical analysis: the PlusDI (Directional Indicator) and the Laguerre filter logic. Its primary purpose is to smooth out volatile price movements to provide a clearer picture of whether the market is trending upward or downward.
Core Mechanics
The script operates by processing historical price data through a multi-step mathematical progression:
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Trend Identification (PlusDI): The tool first looks at the "PlusDI" component, which is a standard technical indicator used to measure the strength of an upward trend relative to a specific timeframe. Instead of just looking at raw prices, it focuses on how much pressure is being applied in a positive direction.
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Smoothing and Filtering (Laguerre Logic): The "Laguerre" portion of the script acts as a sophisticated filter. It takes the raw trend data identified in the first step and runs it through a series of weighted calculations. This is designed to reduce "noise"—those jagged, unpredictable price flickers that often lead to false signals—creating a much smoother curve.
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Momentum Calculation: After smoothing the data, the script calculates the relative difference between various stages of these filtered values. It determines the balance between "positive" and "negative" momentum.
Visual Output and Interpretation
The final result is represented as a value on a scale (typically between 0 and 1). This allows traders to interpret market conditions quickly:
- High Values: Indicate strong positive momentum, suggesting that the upward trend is dominant.
- Low Values: Indicate strong negative momentum, suggesting that the downward trend is taking over.
- Mid-Range Values: Suggest a period of consolidation or neutrality where there is no clear prevailing direction.
By condensing complex price action into a single, smoothed indicator, this script helps traders identify the underlying "flow" of the market without being distracted by minor, insignificant price fluctuations.
//+--------------------------------------------------------------------------+
//| Laguerre PlusDi.mq4 |
//| Emerald King / transport_david |
//| http://finance.groups.yahoo.com/group/MetaTrader_Experts_and_Indicators/ |
//+--------------------------------------------------------------------------+
#property copyright "Copyright © 2005"
#property link "http://finance.groups.yahoo.com/group/MetaTrader_Experts_and_Indicators/"
//----
#property indicator_separate_window
#property indicator_minimum -0.05
#property indicator_maximum 1.05
#property indicator_color1 LawnGreen
#property indicator_level2 0.75
#property indicator_level3 0.50
#property indicator_level4 0.25
//---- input parameters
extern double periods=14;
extern double timeperiods=0;
extern double gamma=0.764;
extern int CountBars=300;
//----
double L0=0;
double L1=0;
double L2=0;
double L3=0;
double L0A=0;
double L1A=0;
double L2A=0;
double L3A=0;
double LRSI=0;
double CU=0;
double CD=0;
double val1[];
//+------------------------------------------------------------------+
//| Custom indicator initialization function |
//+------------------------------------------------------------------+
int init()
{
//---- indicators
//----
SetIndexBuffer(0,val1);
return(0);
}
//+------------------------------------------------------------------+
//| Custor indicator deinitialization function |
//+------------------------------------------------------------------+
int deinit()
{
//---- TODO: add your code here
//----
return(0);
}
//+------------------------------------------------------------------+
//| Custom indicator iteration function |
//+------------------------------------------------------------------+
int start()
{
if (CountBars>Bars) CountBars=Bars;
SetIndexDrawBegin(0,Bars-CountBars);
//----
int i;
int counted_bars=IndicatorCounted();
//if(CountBars<=Lookback) return(0);
//---- initial zero
//if(counted_bars<1)
//{
// for(i=1;i<=Lookback;i++) val1[CountBars-i]=0.0;
//}
i=CountBars-1;
while(i>=0)
{
L0A=L0;
L1A=L1;
L2A=L2;
L3A=L3;
L0=((1 - gamma)*iADX(NULL,timeperiods,periods,PRICE_HIGH,MODE_PLUSDI,i)) + gamma*L0A;
L1=((- gamma *L0) + L0A) + (gamma *L1A);
L2=((- gamma *L1) + L1A) + (gamma *L2A);
L3=((- gamma *L2) + L2A) + (gamma *L3A);
//----
CU=0;
CD=0;
//----
if (L0>=L1) CU=L0 - L1; else CD=L1 - L0;
if (L1>=L2) CU=CU + L1 - L2; else CD=CD + L2 - L1;
if (L2>=L3) CU=CU + L2 - L3; else CD=CD + L3 - L2;
if (CU + CD!=0) LRSI=CU/(CU + CD);
val1[i]=LRSI;
i--;
}
return(0);
}
//+------------------------------------------------------------------+
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