About the Laguerre RSI Indicator
The Laguerre RSI Indicator for MT4 is a popular trend oscillator developed to improve the responsiveness of the classic RSI.
It was created by John Ehlers using a mathematical approach that modifies time coefficients within an EMA-based filter.
This adjustment allows the indicator to react faster to price changes.
While the Laguerre RSI behaves similarly to the traditional RSI, its smoother and quicker response makes it appealing for traders who rely on momentum timing.
It tracks overbought and oversold conditions while reducing lag that often appears in standard oscillators.
The indicator plots a medium purple line in a separate window below the price chart.
This line moves between a lower boundary at zero and an upper boundary at one.
Traders use specific threshold levels within this range to identify potential entries and exits.
It fits naturally into strategies that depend on momentum confirmation rather than delayed signals.
Free Download
Download the “laguerre-rsi.ex4” MT4 indicator
Key Features
- Uses Laguerre filtering to reduce lag compared to classic RSI.
- Plots a smooth medium purple signal line in a separate indicator window.
- Operates within a fixed range between zero and one.
- Highlights momentum shifts through defined threshold levels.
- Produces fewer false signals during ranging conditions.
- Performs consistently across multiple timeframes.
Indicator Chart
The image below shows the Laguerre RSI Indicator displayed in a separate window beneath the main price chart.
The purple line fluctuates between the lower and upper limits, helping traders identify overbought, oversold, and momentum transition zones used for buy and sell decisions.
Guide to Trade with the Laguerre RSI Indicator
Buy Rules
- Monitor the Laguerre RSI line as it moves toward the lower region.
- Enter a buy trade when the line breaks back above the 0.15 level.
- Ensure the broader trend is upward.
Sell Rules
- Watch for the Laguerre RSI line approaching the upper region.
- Enter a sell trade when the line dips back below the 0.75 level.
- Ensure the main trend is downward.
Stop Loss
- Place the stop loss beyond a recent consolidation area.
- A fixed risk stop based on average volatility can be used.
Take Profit
- Target nearby support or resistance levels.
- Partial profits may be taken as momentum slows.
- Trailing stops can be applied during extended moves.
- Exit manually if the indicator reverses direction early.
Laguerre RSI Indicator + Ehlers Histogram Scalping Strategy for M1 and M5
This scalping strategy combines the Laguerre RSI Metatrader 4 Forex Indicator with the Ehlers Histogram Forex Oscillator for MT4.
It is designed for very short-term trading on M1 and M5 charts.
The strategy captures quick market moves by confirming momentum with the Laguerre RSI and trend direction with the Ehlers Histogram.
This approach is suitable for scalpers who prefer fast entries and exits during high volatility periods.
Buy Entry Rules
- Wait for the medium purple line of the Laguerre RSI to break back above the 0.15 level from below.
- Confirm that the Ehlers Histogram shows blue bars, indicating a buy trend.
- Enter a long position once both conditions are met.
- Set the stop loss a few pips below the recent swing low.
- Take profit at a fixed 5–15 pip target or when the Laguerre RSI dips back below 0.15, or the Ehlers Histogram turns red.
Sell Entry Rules
- Wait for the medium purple line of the Laguerre RSI to dip back below the 0.75 level from above.
- Confirm that the Ehlers Histogram shows red bars, indicating a sell trend.
- Enter a short position once both conditions are met.
- Set the stop loss a few pips above the recent swing high.
- Take profit at a fixed 5–15 pip target or when the Laguerre RSI rises above 0.75, or the Ehlers Histogram turns blue.
Advantages
- Fast and precise signals suitable for scalping on M1 and M5 charts.
- Combines momentum and trend confirmation for higher probability trades.
- Helps identify short-term trend reversals quickly.
- A simple strategy makes it easy to monitor multiple pairs at once.
Drawbacks
- Scalping on M1 and M5 can be stressful and mentally demanding.
- Small price fluctuations can trigger stop losses frequently.
- Requires fast execution and a reliable broker to avoid slippage.
- Signals may be less effective during low liquidity periods.
- Not ideal for beginners due to the need for quick decision-making and tight risk management.
Case Study 1
On EURUSD M1, the Laguerre RSI broke above 0.15 after a minor retracement, and the Ehlers Histogram showed blue bars.
A long position was entered with a stop loss 3 pips below the swing low.
Within 8 minutes, the price moved 10 pips upward, and the trade was closed when the Laguerre RSI dipped below 0.15.
The setup captured a quick and precise scalp.
Case Study 2
On GBPUSD M5, the Laguerre RSI fell below 0.75 after a small rally, while the Ehlers Histogram displayed red bars.
A short trade was taken with a stop loss 5 pips above the swing high.
Price dropped steadily, and the position was closed after a 12-pip move when the histogram started to show blue bars.
The strategy captured a clear intraday move with minimal risk.
Strategy Tips
- Focus on currency pairs with strong volatility to improve signal reliability.
- Combine this strategy with a higher time frame trend filter to avoid trading against the major trend.
- Consider scaling out of trades by taking partial profits to secure gains while letting the rest run.
- Use tight stop losses to protect against sudden reversals on M1 and M5 charts.
- Keep track of trading performance in a journal to refine entry and exit timing.
- Avoid trading during low activity periods when signals are more likely to be false.
- Practice patience and only take trades that meet both Laguerre RSI and Ehlers Histogram conditions.
- Adjust trade size according to the volatility of the pair and the time frame being traded.
Download Now
Download the “laguerre-rsi.ex4” Metatrader 4 indicator
FAQ
How is the Laguerre RSI different from the classic RSI?
The Laguerre RSI reacts faster to price changes due to its filtering method.
This often results in smoother signals with reduced lag.
What are the key levels to watch?
The most commonly used levels are 0.15 for potential buys and 0.75 for potential sells.
Does the Laguerre RSI work on lower timeframes?
Yes, it performs well on lower charts where faster momentum feedback is important.
Can the Laguerre RSI be combined with other indicators?
It pairs effectively with trend filters, moving averages, and basic price action tools.
Summary
The Laguerre RSI Indicator for MT4 offers a faster and smoother alternative to the traditional RSI.
Its unique filtering approach helps traders respond to momentum changes without excessive delay.
Defined threshold levels make it easy to apply, while its adaptability allows it to fit a wide range of trading styles.
Traders who value timely momentum confirmation often find the Laguerre RSI a strong addition to their indicator set.
