Ehler Laguerre RSI Oil Trading Technical Analysis & Ehlers RSI Trading Signals

Developed by John Ehlers.

Originally used to trade stocks and commodities.

Ehlers RSI uses a 4-Element Laguerre filter to provide a "time distort" such that the low frequency components/ crude oil price spikes are delayed much more than the higher frequency components. This technical indicator enables much smoother filters to be created using short amounts of data.

The Ehlers RSI uses a scale of 0- 100, the center-line is used to generate oil signals & the 80/20 levels represents overbought-oversold areas.

The only parameter which can be optimized for this technical indicator is damping gamma factor, usually 0.5 to 0.85, to best suit your trading method.

Ehlers Laguerre Relative Strength Index

Oil Trading Technical Analysis & How to Generate Trading Signals

This implementation of the Laguerre RSI uses scale of 0-100.

Oil Trading Crossover Trading Signals

Buy Trading Signal- A buy oil signal is generated when the Ehlers RSI crosses above the 50 level Mark.

Sell Trading Signal- A sell oil signal is generated when the Ehlers RSI crosses below the 50 level Mark.

Oversold/Overbought Levels on Technical Indicator

Oversold/Overbought Levels on Indicator

A typical use of the Laguerre RSI is to buy after it crosses back above the 20% level & sell after it crosses back below the 80% level.