Homodyne Discriminator

The Homodyne Discriminator Cycle Period is a useful VertexFX indicator for measuring cycle period of current market trend. It returns the current cycle period (in bars or candles) of the current market trend (or market cycle).

It uses the concepts of Digital Signal Processing (DSP) to filter market cycle from price chart. The Phase Accumulator, Dual Differentiator and Homodyne Discriminator are from the same family of indicators, providing measurement of cycle period. Homodyne means we are multiplying the signal by itself. To be more precise, we want to multiply the signal of the current bar with the complex conjugate of the signal 1 bar ago. At first the price is smoothed using a 4-bar WMA. Then using techniques of Hilbert Transform, the InPhase and Quadrature components are calculated. These components are smoothed in a unique complex average and then smoothed by an EMA to avoid any undesired cross products in the multiplication step that follows.

NOTE : This indicator does not generate BUY / SELL signals. It is used to find the cycle period that can be used as inputs to other indicators. For example, if the current value of the indicator is 18, then it means that the current cycle period of the price is 18 bars, and this value can be used to calculated period based indicators like RSI, ADX, CCI, ATR etc. Since this indicator value changes, we calculate our indicators like RSI dynamically (18-bar) etc instead of a fixed RSI period.

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.