The Adaptive Laguerre Filter for the cTrader platform was created by John Ehlers, who brought his background in engineering and signal processing into the world of trading. He wasn't satisfied with how traditional moving averages handled changing markets; they were either too slow to react or too sensitive to noise. So he built something better. By using the Laguerre transform and making it adaptive, he came up with a filter that smooths out price data but still stays in sync with the market. 

It adjusts itself depending on how fast or slow things are moving, which makes it worthwhile when you're trying to follow trends without getting whipsawed by small price moves. Over the years, it's become a favourite among traders who want something more refined than a basic moving average.

Adaptive Laguerre Filter Formula

This filter smooths out price action on the cTrader platform while preserving the overall market direction. It adapts to changing volatility, remaining steady during quiet periods and reacting quickly when momentum picks up. It’s a practical choice for traders who want to follow the trend without getting thrown off by every minor fluctuation.

Variables:

• alpha: adaptive smoothing factor, usually between 0 and 1
• price: input price (e.g. close price)
• L0, L1, L2, L3Internal Laguerre levels
• Laguerre: the final output (smoothed value)

Recursive Calculation:

L0 = (1 - alpha) * price + alpha * L0_prev
L1 = -alpha * L0 + L0_prev + alpha * L1_prev
L2 = -alpha * L1 + L1_prev + alpha * L2_prev
L3 = -alpha * L2 + L2_prev + alpha * L3_prev

Laguerre = (L0 + 2 * L1 + 2 * L2 + L3) / 6

Adaptive Alpha Example:

alpha = Math.Abs(price - pricePrev) / smoothingFactor

This approach allows the filter to adjust based on market movement automatically.

Key Concepts

Adaptive smoothing:

The filter adjusts its sensitivity based on recent price changes, helping it stay responsive in fast markets and smooth in slow ones.

Recursive calculation:

Each level is built on the previous one, creating a layered smoothing effect that reduces noise without losing direction.

Low lag:

Because it adapts to current conditions, it reacts quicker than standard moving averages, making it helpful in spotting trend changes early.

Built for chart overlays:

It’s designed to sit directly on the price chart, giving a clear visual of trend direction without cluttering the screen.

Works in all markets:

It can be used in trending or sideways conditions, adjusting its behaviour accordingly.

While the Adaptive Laguerre Filter is a powerful tool, it’s not perfect. If the smoothing is too strong, it can delay signals and cause you to miss good trades. In quiet or sideways markets, it may still produce whipsaws or misleading moves. Since it does not generate signals on its own, you’ll need to pair it with other indicators or use crossovers to decide when to enter or exit. .

How To Install & Remove

First, ensure that you have the cTrader trading platform installed. Then, unzip the file and double-click it to install the platform automatically.

• How to install
• How to open
• How to remove
• How to edit settings

Any Questions?

If you have any questions or encounter any issues, please first search our product help forum for the answer. If you cannot find it, post a new question.

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