This is a discussion on John Ehlers Toolbox within the Trading tools forums, part of the Trading Forum category; Originally Posted by tradewiser Hi newdigital, There are some nice indicators in premium section so I hope to join soon. ...
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Igor,
Is AMA algo similar to the "Instantaneous Trendline" indicator from Ehler's work?
Short explanation from Ehler:
Cheers, Snow.Simple Averages are of more interest for use with cycles because they can be used to completely eliminate the dominant cycle component. The transfer response of a simple average is Sin(X) / X, which is the Fourier Transform of its rectangular weighting function. X is π times the frequency being filtered relative to the cycle length that just fits in the average window.
Consider an average length that is exactly one cycle long. Within this averaging window there are exactly as many sample points above the center as below it. The result is that the average is zero, and the cycle within this window is completely eliminated by the averaging. We can make the simple average length just the length of the dominant cycle on any given day. This eliminates the dominant cycle at the output of the filter.
If we repeat this every day, and connect the filter output values together, we have an adaptive moving average where the dominant cycle is completely eliminated. This adaptive moving average then becomes an instantaneous trendline because we asserted our model of the market could only have a Cycle Mode and a Trend Mode. Since the cyclic components are eliminated, the residual must be the instantaneous trendline. Creating an instantaneous trendline is a significant result of our cyclic analysis.
Last edited by Snowski; 03-08-2014 at 01:18 AM.
Igorad was talking about indicator from the first post of this thread - about AllMAMA_v2.3 indicator.
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I think - yes (it was reply of Igorad).
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Ok, thanks NewDigital!
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