EHLERS TREND NORMALIZED Trading Guide
The Ehlers Trend Normalized is an adaptation of John Ehlers' Motherlode Trend indicator, incorporating a strict normalization algorithm. It guarantees that the output strictly oscillates between -100 and 100 percentages, making it far superior for fixed-threshold strategies (like overbought/oversold boundaries) than raw numeric DSP models.
What does the indicator show?
- Normalized Trend Line: A percentage-based momentum curve bounded exactly between -100 and +100.
- Reference Levels: Static dashed lines plotted at +100, +50, 0, -50, and -100 to quickly identify extremes.
- Gradient Histogram: Visualizes the strength of the trend relative to the zero baseline.
- Background Highlights (Strong Trend Zones): Vertical shades appearing when absolute momentum passes the 50% threshold and continues accelerating.
Key Settings
- High-Pass Period & SuperSmoother Period: The DSP frequency cutoff and noise-reduction smoothing parameters.
- Normalization Period: The critical lookback window used to find the maximum baseline amplitude. If set to 100, the indicator scales its current value against the biggest move seen in the last 100 bars.
- Source: Select the price input (Close, HL2, HLC3) used to feed the DSP algorithm.
How to use Strategy Parameters (Condition Source)
Within the Strategy Tester module, you can leverage the data from this indicator to create powerful logical conditions for trade entries and exits.
1. Percentage-Based Extremes
Because the indicator is mathematically bounded, it is perfect for detecting structural over-extensions.
normVal— The current normalized trend percentage (-100 to 100).
Strategy Example: A mean-reversion counter-trend model could look for short entries when normVal > 95, indicating the upside move has mathematically tapped its historical maximum amplitude limit.
2. Verified Strong Trends
Provides boolean signals confirming established momentum.
isStrongBull— Triggers when the normalized value is > 50% and continuing to rise.isStrongBear— Triggers when the normalized value is < -50% and continuing to fall.
Strategy Example: Only allow Short continuation trades to execute on pullbacks if isStrongBear is true, confirming the underlying force is heavily skewed downward.