[blackcat] L2 Ehlers Super Smooth Stoch Strategy

5 dic 2020

Level: 2

Background

John F. Ehlers introuced Super Smooth Stochastic Indicator in Jan, 2014.

Function

In “Predictive And Successful Indicators” of in, 2014, John Ehlers presented another innovative way to eliminate noise from classic indicators and introduces some new smoothing indicators: the SuperSmoother filter, which is superior to moving averages for removing aliasing noise, and the MESA Stochastic oscillator, a stochastic successor that removes the effect of spectral dilation through the use of a roofing filter.

John Ehlers described a new method for smoothing market data while reducing the lag that most other smoothing techniques have. Ehlers had provided an approach for creating a strategy. For convenience, I made the same code available at tradingview pine v4 as well as an example strategy based on Ehlers’ description. Ehlers introduced a simple countertrend system that goes long when MESA Stochastic crosses below the oversold value and reverses the trade by taking a short position when the oscillator exceeds the overbought threshold.


Key Signal


MyStochastic --> Super Smooth Stochastic line
long ---> long entry signal
short ---> short entry signal

Pros and Cons

100% John F. Ehlers definition translation, even variable names are the same. This help readers who would like to use pine to read his book.

Remarks

The 81th 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.

15 apr

Note di rilascio

OVERVIEW The "[blackcat] L2 Ehlers Super Smooth Stoch Strategy" is a technical analysis indicator that applies Ehlers' Super Smoother algorithm to the Stochastic oscillator, providing enhanced signal clarity for trend identification and overbought/oversold conditions.
FEATURES
• Advanced smoothing using Ehlers' proprietary algorithms
• Customizable parameters for Length, Overbought (OBLevel), and Oversold (OSLevel)
• Clear visual signals with BUY/SELL labels
• Multi-colored threshold zones for better visibility
• Real-time trading signals based on stochastic crossovers

HOW TO USE

Add the indicator to your chart
Adjust the input parameters: • Length: Period for stochastic calculation (default: 20) • OBLevel: Overbought threshold (default: 0.8) • OSLevel: Oversold threshold (default: 0.2)
Monitor the yellow line movement for trend direction
Look for BUY labels when price crosses below OSLevel
Watch for SELL labels when price crosses above OBLevel
LIMITATIONS
• Requires sufficient historical data for accurate calculations
• Performance may vary across different market conditions
• Default threshold levels should be adjusted based on specific asset volatility

NOTES
• The indicator uses Ehlers' Super Smoother filter for noise reduction
• Color coding helps distinguish between different market states
• Labels appear only during signal events for reduced chart clutter