Better System Trader

048: John Ehlers discusses indicator lag, applications of Digital Signal Processing (DSP) in trading, the MESA approach, Cycles and regime switching.

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Sinopsis

Trading can be tough, markets are noisy and finding signals in the market noise can be challenging. Also, applying indicators to trading strategies can introduce lag, however a lot of traders don’t even realize the lag their indicators are introducing or the impact it can have on trading. In fact, the guest in our chat today, John Ehlers said “One of the biggest enemies of traders is lag”. So, what's the solution? John Ehlers is well known in the commodity futures arena as the Creator of MESA, having pioneered the MESA method of cycle analysis in the late 1970's and becoming the founder of MESA Software. He is author of four books including Rocket Science for Traders, Cycle Analytics for Traders, Cybernetic Analysis for Stocks and Futures and MESA and Trading Market Cycles. He has also been a contributing editor of Stocks & Commodities, winning a number of awards for his work. In our chat with John we discuss the issue of indicator lag, the impact it can have on trading and some solutions. We also talk ab