Zero Lag EC
Zero Lag Error Corrected EMA attempts to eliminate lag by adding an error term to the EMA.
Usage
Use as a near-zero-lag moving average for trend-following systems. The error-correction term removes the lag inherent in the standard EMA without introducing significant overshoot.
Background
Ehlers introduces the Zero Lag indicator in Cybernetic Analysis as an EMA with an added error-correction term that subtracts the average lag from the output. The resulting EC (Error Corrected) line tracks price with near-zero delay while the ZL-EMA provides a smoothed reference, with crossovers between them providing trade signals.
Parameters
length(default: 20): Equivalent SMA lengthgain_limit(default: 50.0): Gain limit (divided by 10 for actual gain)
Formula
[ \alpha = \frac{2}{Length + 1} ] [ EMA = \alpha \times Close + (1 - \alpha) \times EMA_{t-1} ] [ EC = \alpha \times (EMA + Gain \times (Close - EC_{t-1})) + (1 - \alpha) \times EC_{t-1} ]