[blackcat] L2 Ehlers Universal Oscillator

Level: 2


John F. Ehlers introuced Universal Oscillator in Jan, 2015.

In “Whiter Is Brighter”, in Jan 2015, John Ehlers presented a new indicator he calls the universal oscillator. It is based on his theory that market data resembles pink noise, or as he puts it, “noise with memory.” It could be used to create a short-term trading strategy. I modified it a little bit by changing the scan criteria that is met when the universal oscillator crosses above or below a pair of threshold values e.g. +/- 0.85. Therefore, a straightforward short-term (small time scale) countertrend system could, for example, use the following rules:

## Cover your short position and go long when the universal oscillator crosses below zero or a overbought/oversold threholds e.g. +/- 0.85; sell and go short when the universal oscillator crosses above zero or a overbought threhold e.g. + 0.85.

Since it is really a universal oscillator, the indicator can power up a trend-trading system just as easily:

## Buy when the long-term universal oscillator crosses above zero or a oversold threshold e.g. - 0.85.
## Sell when the long-term universal oscillator crosses below zero or a overbought threshold e.g. 0.85.

Key Signal

Universal --> Universal Oscillator signal
long ---> long entry signal
short ---> short entry signal

Pros and Cons

99% John F. Ehlers definition translation, even variable names are the same. This help readers who would like to use pine to read his book.


The 83th script for Blackcat1402 John F. Ehlers Week publication.


In real life, I am a prolific inventor. I have successfully applied for more than 60 international and regional patents in the past 12 years. But in the past two years or so, I have tried to transfer my creativity to the development of trading strategies. Tradingview is the ideal platform for me. I am selecting and contributing some of the hundreds of scripts to publish in Tradingview community. Welcome everyone to interact with me to discuss these interesting pine scripts.

The scripts posted are categorized into 5 levels according to my efforts or manhours put into these works.

Level 1 : interesting script snippets or distinctive improvement from classic indicators or strategy. Level 1 scripts can usually appear in more complex indicators as a function module or element.

Level 2 : composite indicator/strategy. By selecting or combining several independent or dependent functions or sub indicators in proper way, the composite script exhibits a resonance phenomenon which can filter out noise or fake trading signal to enhance trading confidence level.

Level 3 : comprehensive indicator/strategy. They are simple trading systems based on my strategies. They are commonly containing several or all of entry signal, close signal, stop loss, take profit, re-entry, risk management, and position sizing techniques. Even some interesting fundamental and mass psychological aspects are incorporated.

Level 4 : script snippets or functions that do not disclose source code. Interesting element that can reveal market laws and work as raw material for indicators and strategies. If you find Level 1~2 scripts are helpful, Level 4 is a private version that took me far more efforts to develop.

Level 5 : indicator/strategy that do not disclose source code. private version of Level 3 script with my accumulated script processing skills or a large number of custom functions. I had a private function library built in past two years. Level 5 scripts use many of them to achieve private trading strategy.

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