Reflex - A new Ehlers indicator

17. Juli 2020

Source: Stocks and Commodities V38

Hooray! A new John Ehlers indicator!
John claims this indicator is lag-less and uses the SPY on the Daily as an example.
He states that drawing a line from peak to peak (or trough to trough) will correspond perfectly with the Asset.
I have to say I agree! There is typically one bar of lag or no lag at all!

I believe this indicator can be used for either entries or exits, but not both.

Entry
1. Entering Long positions at the pivot low points (Stocks and ETFs)
2. Entering Long when the Reflex crosses above the zero lines (Stocks, ETFs, Commodities)

Exit
1. Exiting Long positions at a new pivot high point (Stocks and ETFs)
2. Exiting Long when the Reflex crosses below the zero lines (Stocks, ETFs, Commodities)

In this example, I place a Long order on the SPY every time the Reflex crosses above the zero level and exit when it crosses below or pops my stop loss, set at 1.5 * Daily ATR.
4/6 Wins
+10.76%
For me, that's good enough to create a strategy and backtest on several Indices and ETFs, which is what I have a hunch this will work on.

I think there is a lot of promise from a single Indicator!
Let me know in the comment section if you're able to use this in a strategy.

1. Aug. 2020

Versionshinweise

Updated aesthetic and added 10-bar ATR label