OPEN-SOURCE SCRIPT
Updated Smoothed Low-Pass Butterworth Filtered Median [AlphaAlgos]
Smoothed Low-Pass Butterworth Filtered Median
This indicator is designed to smooth price action and filter out noise while maintaining the dominant trend. By combining a Butterworth low-pass filter with a median-based smoothing approach, it effectively reduces short-term fluctuations, allowing traders to focus on the true market direction.
How It Works
Features
How to Use
This indicator provides a clear, noise-free view of market trends, making it ideal for traders seeking improved trend identification and entry signals.
This indicator is designed to smooth price action and filter out noise while maintaining the dominant trend. By combining a Butterworth low-pass filter with a median-based smoothing approach, it effectively reduces short-term fluctuations, allowing traders to focus on the true market direction.
How It Works
- Median Smoothing: The indicator calculates the 50th percentile (median) of closing prices over a customizable period [len], making it more robust against outliers compared to traditional moving averages.
Butterworth Filtering: A low-pass filter is applied using an approximation of the Butterworth formula, controlled by the Cutoff Frequency [cutoffFreq], helping to eliminate high-frequency noise while preserving trends.
EMA Refinement: A 7-period EMA [emalen] is applied to further smooth the signal, providing a more reliable trend representation.
Features
- Trend Smoothing: Reduces market noise and highlights the dominant trend.
Dynamic Color Signals: The EMA line changes color to indicate trend strength and direction.
Configurable Parameters: Customize the median length, cutoff frequency, and EMA length to fit your strategy.
Versatile Use Case: Suitable for both trend-following and mean-reversion strategies.
How to Use
- Bullish Signal: When the EMA is below the price and rising, indicating upward momentum.
Bearish Signal: When the EMA is above the price and falling, signaling a potential downtrend.
Reversal Zones: Monitor for trend shifts when the color of the EMA changes.
This indicator provides a clear, noise-free view of market trends, making it ideal for traders seeking improved trend identification and entry signals.
Release Notes
Updates to Coloring UIOpen-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.