Ehlers-Smoothed Stochastic RSI

The Ehlers-Smoothed Stochastic RSI indicator combines the responsiveness of the Stochastic RSI formula with the advanced noise reduction of Ehlers' Super Smoother to provide earlier and more reliable trend signals.

Usage

The indicator can be used to identify trend reversals and momentum shifts by monitoring the interactions between the smoothed %K line and its signal line (%D). Users can look for the following:

• Bullish Signals: A bullish circle appears when the %K line crosses above the %D line while below the 50 midpoint, accompanied by positive momentum confirmation.
• Bearish Signals: A bearish circle appears when the %K line crosses below the %D line while above the 50 midpoint, accompanied by negative momentum confirmation.
• Overbought/Oversold: The oscillator tracks values between 0 and 100, with levels above 80 indicating overbought conditions and levels below 20 indicating oversold conditions.

Details

This implementation applies the Stochastic formula to RSI values derived from the log-transform of price. Unlike standard versions that may use simple moving averages for smoothing, this tool utilizes the Ehlers Super Smoother. This specific filter is designed to provide significant noise reduction with minimal lag, often yielding earlier crossover signals compared to traditional EMA-based smoothers. The script avoids the use of "Roofing Filters" to maintain stability and accuracy during periods of extreme price volatility.

Settings

Main Settings

• K: Sets the lookback period for the Ehlers Super Smoother applied to the raw Stochastic RSI.
• D: Sets the period for the Simple Moving Average (SMA) used as the signal line.
• RSI Length: The lookback period used for the internal RSI calculation.
• Stochastic Length: The lookback period used for the Stochastic calculation applied to the RSI.
• Buy/Sell Signals: Toggles the visibility of the circle markers on the oscillator.
• Source: The price data input used for calculations (default is Close).

FAQ

How do I access the Ehlers-Smoothed Stochastic RSI?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.

How does the Ehlers Super Smoother differ from an EMA?

The Ehlers Super Smoother is a specialized filter designed to reject noise more aggressively while maintaining less lag than a standard Exponential Moving Average, leading to faster signal generation.

Can I use this for trend following?

Yes, the indicator is effective for trend following by observing the position of the smoothed lines relative to the 50 midpoint and using crossovers to identify entry and exit points in alignment with momentum.