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Laguerre RSI with Laguerre Filter is a small strategy that includes several indicators, the calculations of which, in turn, are smoothed out by using an additional filter. The indicator's calculations are based on the interaction of the Laguerre and RSI forex trading indicators and are used to determine the direction and strength of the current market trend, which in turn allows determining the moment of opening a trade. In addition, the indicator window indicates the zone in which trades should not be opened. It is presented in the lower window of the price chart in the form of two lines: signal and main, which, depending on the current trends moving in a certain direction are painted in a certain color, crossing their signal levels. Their current values serve as a signal that determines the current trend.
The Laguerre RSI with Laguerre Filter indicator is suitable for trading any currency pair on any timeframe.
Input parameters
The settings of the Laguerre RSI with Laguerre Filter indicator consist of several sections, which in turn are responsible for its general functioning. The Input parameter section is used to change the values of its technical work, the Colors section is used to change the visualization, and the Levels section is responsible for adding signal levels to the indicator window.
-Laguerre RSI gamma - calculation period of the indicator. The default value is 0.8.
-Price - type of the price to which the indicator calculations are applied. By default, it has the Close price value.
- Laguerre RSI smooth gamma - value of the period for smoothing the indicator's calculations. The default value is 0.001.
- Laguerre RSI smooth speed (min 0,max 6) - the speed at which smoothing calculations are applied. The default value is 2.
-Laguerre filter gamma - period of applied calculation in the indicator filter. The default value is 0.6.
-Laguerre filter speed (min 0,max 6) - calculation filter application speed. The default value is 2.
-Level up - value of the upper signal level of the indicator. The default value is 0.85.
-Level down - value of the lower level of the indicator. The default value is 0.35.
-No trade zone up - level, which is responsible for the upper limit of the non-trading zone. The default value is 0.65.
-No trade zone down - the lower level of the non-trading zone of the indicator. The default value is 0.35.
-Color change mode: - the parameter responsible for the moment of changing the color of the main line of the indicator. By default, it is set to Change colors on outer levels crossing.
Indicator signals
The Laguerre RSI with Laguerre Filter indicator is very easy to use due to its clear and easy-to-understand visualization. To open a certain trade using the indicator, it should be determined the strength and direction of the current market trend. To do this, it should be taken into account the direction of its lines, the color of the main line and their general location relative to signal levels. If the current trend in the market is upward, buy trades are opened, with a downward trend, sell trades. When a signal characterizing a change in trend is received, trades are closed. At the same time, when the indicator is in a non-trading zone, trades are not opened at all.
Signal for Buy trades:
- The indicator lines are moving upward, above the level of 0.85, while the main line, colored in color with a growth value, is above the signal line.
When a full combination of such conditions is received, a buy trade can be opened on a signal candle due to the presence of a strong upward trend in the current market. It should be closed when the current trend changes, that is, when the color and direction of the line changes or during its stay in the non-trading zone. At this point, it should be considered opening new trades or simply closing current ones.
Signal for Sell trades:
- The indicator is below the non-trading zone and its main line has a color with a fall value and is above the signal line. Both lines are below the level of 0.15.
After receiving such conditions that characterize the presence of a downward trend in the market, a sell trade can be opened. If the opposite conditions are received from the indicator or at the moment it enters the non-trading zone, the trade should be closed. If the trend direction changes, opening new trades can be considered.
Conclusion
The Laguerre RSI with Laguerre Filter indicator is a very effective trading algorithm, since its calculations are based on the functioning of accurate Forex indicators, the calculations of which are also smoothed using an additional filter. The indicator is extremely easy to use, and before using it on a real deposit, it is recommended to use a demo account.
