Ehlers Loops [BigBeluga]

The Ehlers Loops indicator is based on the concepts developed by John F. Ehlers, which provide a visual representation of the relationship between price and volume dynamics. This tool helps traders predict future market movements by observing how price and volume data interact within four distinct quadrants of the loop, each representing different combinations of price and volume directions. The unique structure of this indicator provides insights into the strength and direction of market trends, offering a clearer perspective on price behavior relative to volume.

🔵 KEY FEATURES & USAGE

● Four Price-Volume Quadrants:
The Ehlers Loops chart consists of four quadrants:
- +Price & +Volume (top-right) – Typically indicates a bullish continuation in the market.
- -Price & +Volume (bottom-right) – Generally shows a bearish continuation.
- +Price & -Volume (top-left) – Typically indicates an exhaustion of demand with a potential reversal.
- -Price & -Volume (bottom-left) – Indicates exhaustion of supply and near trend reversal.
By watching how symbols move through these quadrants over time, traders can assess shifts in momentum and volume flow.
- ● Price and Volume Scaling in Standard Deviations:
  Both price and volume data are individually filtered using HighPass and SuperSmoother filters, which transform them into band-limited signals with zero mean. This scaling allows traders to view data in terms of its deviation from the average, making it easier to spot abnormal movements or trends in both price and volume.
- ● Loops Trajectories with Tails:
  The loops draw a trail of price and volume dynamics over time, allowing traders to observe historical price-volume interactions and predict future movements based on the curvature and direction of the rotation.
- ● Price & Volume Histograms:
  On the right side of the chart, histograms for each symbol provide a summary of the most recent price and volume values. These histograms allow traders to easily compare the strength and direction of multiple assets and evaluate market conditions at a glance.
- ● Flexible Symbol Display & Customization:
  Traders can select up to five different symbols to be displayed within the Ehlers Loops. The settings also allow customization of symbol size, colors, and visibility of the histograms. Additionally, traders can adjust the LPPeriod and HPPeriod to change the smoothness and lag of the loops, with a shorter LPPeriod offering more responsiveness and a longer HPPeriod emphasizing longer-term trends.
🔵 USAGE🔵 SETTINGS
- Low pass Period: default is 10 to
  obtain minimum lag with just a little smoothing.
- High pass Period: default is 125 (half of the year if Daily timeframe) to capture the longer term moves.
🔵 CONCLUSIONThe Ehlers Loops indicator offers a visually rich and highly customizable way to observe price and volume dynamics across multiple assets. By using band-limited signals and scaling data into standard deviations, traders gain a powerful tool for identifying market trends and predicting future movements. Whether you're tracking short-term fluctuations or long-term trends, Ehlers Loops can help you stay ahead of the market by offering key insights into the relationship between price and volume.

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Open-source script

For quick access on a chart, add this script to your favorites — learn more here.

BigBeluga

Also on: