John F. Ehlers presented the “Universal Oscillator” in the January 2015 issue of the “Technical Analysis of Stocks & Commodities” magazine

Ehlers is well known for his signal processing tools related to cyclic filtering and smoothing. So it is a must to add this new indicator that works both as a countertrend oscillator and as a trend identifier.

Ehlers describes the indicator in the article as follows:

“It only takes a cursory examination of the chart to see that the cyclic variations of the oscillator are almost perfectly aligned with the short-term variations in the price data with no delay. Since the universal oscillator was derived from a white noise spectrum, I doubt that a better oscillator can be generated. The universal oscillator has essentially zero lag as an indicator and can also be used as the basis of identifying trends.”

Universion Oscillator on EUR/USD 5min. chart

The indicator is shown as example on the EUR/USD currency pair for the last two days. The red/green arrows highlight the turning points of the oscillator and have been executed as trade signals in the WhenToTrade platform.

John F. Ehlers Universal Oscillator

Trading the Universal Oscillator

The standard strategy generated 200 pips profit within the last two days. So it is worth to have a closer look at this new indicator or combine it with other cyclic tools. A turn above 0 is bullish (uptrend) and a turn below 0 is bearish (downtrend). The indicator could be transferred into trading signals as any oscillator. The equity curve of the shown trade signals for the last two days is shown below.

John F. Ehlers Universal Oscillator

C# Universal Oscillator Version

We have transferred the EasyLanguage code into a C# indicator code which can be used in our WhenToTrade platform.

C# script

Please import the C# source file (.zip) at the end of this article and import the .zip file via the menu function “Scripting -> Import Script Package”. That’s all. Afterwards you can select the indicator from the indicator launch panal and use it in your own trading/alert scripts or feed the genetic algorithm with his new indicator.

Donwload Indicator C# Package

EhlersUniOsc