[blackcat] L2 Ehlers Correlation Cycle

2 gen 2021

Level: 2

Background

John F. Ehlers introuced Correlation Cycle indicator in Jun, 2020.

Function

In his article “Correlation As A Cycle Indicator” in Jun, 2020, John Ehlers introduces a companion to the trend indicator he presented in his article. This new indicator is designed to help traders navigate cycling markets. The new cycle indicator can help the trader get into trades earlier and have better insight into prevailing market conditions. While his correlation trend indicator measures the price correlation with a rising slope, the new correlation cycle indicator (CCY) measures the correlation with a sine wave.The new system trades only when the market state is 1 or -1, indicating trend regime. It goes out of the market when the market state is 0.


Key Signal

State --> +1 for long and -1 for short

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 96th 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.

5 giorni fa

Note di rilascio

OVERVIEW
This indicator implements the Ehlers Correlation Cycle (ECC) algorithm to determine market state based on price correlation with sinusoidal waves. It provides visual and alert-based signals for bullish (-1) and bearish (1) market conditions.

FEATURES

• Calculates correlation between price data and theoretical sinusoidal waves
• Generates market state indicators (-1 for bullish, 1 for bearish)
• Includes customizable parameters for price source and period length
• Provides visual alerts through colored background areas
• Allows theoretical testing using predefined periodicity

HOW TO USE

Select your preferred price source using the 'Price' input
Adjust the 'Period' parameter to match your analysis timeframe
Optional: Set 'Input Period' for theoretical testing with fixed periodicity
Monitor the colored background area: • Yellow indicates bullish state (-1) • Fuchsia indicates bearish state (1) • Gray indicates neutral state (0)
LIMITATIONS

• Performance may vary depending on selected period length
• Results are most effective with sufficient historical data
• Theoretical testing mode requires careful interpretation

NOTES

• The indicator plots three horizontal lines at 0, 1, and -1 for reference
• Alert conditions are triggered when market state changes to -1 or 1
• Default settings use HLC3 price and 34-period length