AM Detector

Ehlers DSP cycle ehlers dsp amplitude frequency

Recovers market volatility from the amplitude-modulated whitened price spectrum.

Usage

Use to extract the instantaneous amplitude and frequency of market cycles. The AM output measures cycle energy for position sizing; the FM output tracks cycle period for adaptive indicator tuning.

Background

Ehlers adapts AM and FM demodulation techniques from radio engineering in Cycle Analytics for Traders to extract cycle amplitude and instantaneous frequency from market data. The amplitude envelope measures how energetic the current cycle is, while FM reveals whether the cycle period is expanding or contracting.

Parameters

• highest_len (default: 4): Envelope lookback length
• avg_len (default: 8): Smoothing length

Formula

\[ Deriv = |Close - Open|, Envel = \max(Deriv, 4), Volatil = \text{Avg}(Envel, 8) \]

Source