ZeroLag Indicator

Zero Lag Indicator is a VertexFX client side Indicator based on EMA indicator (attempts) to eliminate lag from EMA. This indicator is based on the concept of Kalman filtering (and thus falls in the category of Kalman filters).

The smoothing constant Alpha defines the amount of lag to be reduced. For example, when Alpha is 0.33, the lag is 2 bars. It is responsive for intra-day trading on cyclical markets where lag can be reduced.

At first, price is smoothed using WMA. Then we attempt to remove lag by filtering the momentum. Finally, this is smoothed once again using Alpha smoothing to derive Zero Lag indicator.

BUY – Place Buy position when indicator color turns Blue, and the High of current bar is less than High of previous bar, and the close of current bar is in upper half of the range. Exit Buy position when the indicator color turns Red.

SELL – place Sell trade when indicator color turns Red, and the Low of current bar is greater than the Low of previous bar, and the close of current bar is in lower half of the range. Exit Sell position when the indicator color turns Blue.

Usage

• Download the attachment.
• Copy it to your company VertexFX  Local VTL Files folder i.e. C:Program FilesCompany Namevtl10Local VTL Scripts
• Restart your Client Terminal or Right Click on “Local VTL Scripts” Tree Node to find the script.