The Laguerre Filter passes price through four stages. The first stage is an exponential smoothing with factor 1 - Gamma. Each later stage is an all-pass section that takes the stage above it and its own previous value, delaying the signal a little more without smoothing it away. The plotted value is a weighted mix of the four, (L0 + 2 * L1 + 2 * L2 + L3) / 6.
The single setting, Gamma, controls how much each stage leans on its past. At 0 the filter is a plain weighted average of the last four prices. As Gamma rises toward 1 each stage holds on to its history more, so the line gets smoother and slower.
All four stages start at the first price, so the line begins on the first bar at the price itself.
How to read Ehlers Laguerre Filter (LAGUERRE)
Read the line as a smoothed price whose speed you set with one number. Its slope gives the direction of the trend, and a turn in the line marks a turn in the swing at the scale Gamma implies. Price holding above a rising line fits an uptrend; price holding below a falling line fits a downtrend.
Because the filter reaches a smooth result from only four stages, it reacts faster than a long moving average of similar smoothness, but it still lags. High values of Gamma lag a lot and can miss quick reversals; low values follow price closely and show more noise.
Settings
- Gamma
- The damping factor from 0 to 0.99. 0 gives a short weighted average; higher values smooth more and lag more.
- Source
- The price series the filter smooths, the close by default.
Frequently asked questions
What happens at a Gamma of 0?
Each stage simply passes on the previous stage's last value, so the line becomes a fixed weighted average of the last four prices with weights 1, 2, 2 and 1.
Why does it need so little history?
The smoothing comes from the four recursive stages rather than from a long window, so it answers from the first bar.
How is it different from the adaptive version?
Here the damping factor is fixed by Gamma. The adaptive version recomputes it every bar from how far the filter has fallen behind price.
