Thread: Ergodic Signals - Vertex FX Indicator

Ergodic Signal is a powerful VertexFX client side VTL indicator that gives precise and accurate entry and exit signals in cyclical markets. It is based upon the Ergodic Oscillator which itself is an excellent oscillator for cyclical markets. The concept behind the Ergodic Oscillator indicator is the absolute change in closing prices.
In the first step, we calculate the change in the current close price from the previous close price.
In the second step, we calculate the absolute change in the current close price from the previous close price.
In the third step, we calculate the moving average of the change in closing prices, and the absolute change in closing prices over R_FIRST period. If the SMOOTHING_MODE is 0, we calculate the Simple Moving Averages, otherwise we calculate the Exponential Moving Averages.
In the fourth step, we again calculate the moving averages of the moving averages calculated in the previous step using the S_SECOND period.
The main component is calculated as the ratio between the 2^nd order moving average of the change in candle closes, against the 2^nd order moving average of the absolute change in candle closes (both calculated in step four). This ratio is expressed as percentage. The signal component is calculated as the moving average over the SIGNAL_PERIOD of the main component.
When the main component closes above the signal component, a BUY signal is generated. When the main component closes below the signal component, a SELL signal is generated.
BUY - Enter BUY trade when the BUY (GREEN) arrow is displayed at the close of the candle. Do not enter trade if the candle has gap-up opening. Stop-loss can be placed at the nearest Swing Low level.
SELL - Enter SELL trade when the SELL (RED) arrow is displayed at the close of the candle. Do not enter trade if the candle has a gap-down opening. Stop-loss can be placed at the nearest Swing High level.