Two Pole Butterworth Filter is a VertexFX Indicator based upon Digital Signal Processing (DSP) concepts for identifying market trends.
DSP is used to eliminate noise (whipsaws) in prices and reduces lag (frequency delay) as much as possible to get accurate and fast signals. This indicator uses the Butterworth filter logic which is a low-pass filter.
We first calculate the filter based upon Median price. Then 3rd order (2nd degree) of smoothing is applied to derive the indicator value.
This indicator successfully eliminates whipsaws without introducing lag, which helps in identify excellent trading opportunities.
BUY - Place Buy position when price closes above the indicator. Place stop-loss at the nearest swing low.
SELL - Place Sell position when price closes below the indicator. Place stop-loss at the nearest swing high.
DSP is used to eliminate noise (whipsaws) in prices and reduces lag (frequency delay) as much as possible to get accurate and fast signals. This indicator uses the Butterworth filter logic which is a low-pass filter.
We first calculate the filter based upon Median price. Then 3rd order (2nd degree) of smoothing is applied to derive the indicator value.
This indicator successfully eliminates whipsaws without introducing lag, which helps in identify excellent trading opportunities.
BUY - Place Buy position when price closes above the indicator. Place stop-loss at the nearest swing low.
SELL - Place Sell position when price closes below the indicator. Place stop-loss at the nearest swing high.
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