The Optimum Predictor was created by John Ehlers (Rocket Science For Traders pgs 209-210) and this indicator does a pretty good job of predicting major market moves. When the blue line crosses over the red line then this indicator is predicting an upcoming uptrend and when the blue line crosses under the red line then it is predicting an upcoming downtrend. Ehlers recommends using this indicator with an entire trading system to filter out any bad signals but most of the signals it gives are pretty accurate. He uses advanced digital signal processing to predict the future prices and uses it in an ema formula for the calculation. There are several ways to interpret this indicator: you can look for crossovers, you can also look for when the indicator goes above 0 for a general uptrend or below 0 for a general downtrend.
Let me know if there are any other scripts you would like to see me publish!
This does an okay job of predicting downtrend, but only after it's half way down. It does a poor job of predicting uptrend. Usually the Red line is on top all the way until the top of the trend, which is obviously too late. There are better indicators that will alert you 2-3 candles before this one does.
cheatcountry
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@jashall, That makes sense because this is one of John Ehlers first indicators and he has done several that do a better job since then.
jashall
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@cheatcountry, Do you know which ones work better? There are a ton with Ehlers in the name.
cheatcountry
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@jashall, I know he has a few recent ones that I'm still having trouble converting to Pine because of the issues with the Mesa Dominant Cycle script. His newest predictor indicator is the Voss Predictive Filter and you can find it on my list of scripts.
crypteisfuture
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Very powerful indicator, thank you! p.s Im testing all your indicators lol :)