The even better sinewave is another indicator of signal noises filtering made by John F. Ehlers. It introducts cycles passthru as low pass filter of prices. This indicator is described in the John Ehlers’book “Cycle Analytics for Traders”.

As any other bounded oscillator, this one also include “overbought” and “oversold” territories of 0.85 and -0.85 default levels.

As a matter of fact this indicator can nicely show bullish and bearish cycle momentum of price but also with some lagging effect, included by its filtering capability. It should not be use alone but as it is intended to do, like a filter.

//parameters 
// Duration = 36
// lowerBand = 9

if(barindex>10) then

 OB = 0.85 
 OS = -0.85
 Pi = 3.14159265358979

 angle = ((360*Pi)/180)/Duration
 alpha1 = (1-sin(angle))/cos(angle)
 HP = 0.5*(1+alpha1)*(close-close[1])+alpha1*HP[1]

 ang = sqrt(2)*Pi/lowerBand
 a1 = exp(-ang)
 b1 = 2*a1*cos(ang)
 c2 = b1
 c3 = -a1*a1
 c1 = 1 - c2 - c3
 filt = c1*(HP + (HP[1]))/2 + c2*(filt[1]) + c3*(filt[2])

 Wave = (filt+filt[1]+filt[2])/3
 Pwr = (filt*filt+filt[1]*filt[1]+filt[2]*filt[2])/3

 sineWave = Wave / sqrt(Pwr)
endif

RETURN sineWave coloured(255,255,0) as "SineWave", OB as "Overbought level", OS as "Oversold level"