Theory:
Have you ever wondered how to gauge the current market conditions? John Ehlers developed a nifty tool called the bandpass filter, which you can dive into here. This filter helps identify what we refer to as "market mode". By calculating the average of market peaks and valleys, it determines whether the market is bullish or bearish based on its position relative to these levels.
Usage:
One effective way to utilize this indicator is by watching for color changes, which can serve as powerful trading signals.
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