Hilbert Transform - Dominant Cycle Phase

Overview

The Hilbert Transform - Dominant Cycle Phase is an advanced technical indicator that measures the instantaneous phase angle of the dominant market cycle. Part of John Ehlers' suite of cycle analysis tools, this indicator tells you exactly where the current price is within its dominant cycle, expressed as an angle from 0° to 360°.

Using the InPhase and Quadrature components derived from the Hilbert Transform, the indicator calculates the arctangent of their ratio to determine the phase angle. This phase information is crucial for cycle trading as it identifies peaks and valleys in real-time, allowing traders to anticipate turning points before they occur, especially when combined with the Lead Sine indicator.

Interpretation & Trading Signals

Phase Angles & Market Position:

  • 0° to 90°: Early upward cycle - price rising from trough toward midpoint
  • 90° to 180°: Late upward cycle - price rising from midpoint toward peak
  • 180° to 270°: Early downward cycle - price falling from peak toward midpoint
  • 270° to 360°/0°: Late downward cycle - price falling toward trough

Trading Applications:

  • Cycle Turning Points: Phase near 0° indicates cycle trough, near 180° indicates peak
  • Lead Sine Indicator: Sine of phase + 45° provides early turning point signals
  • Entry Timing: Buy when phase approaches 0°, sell when approaching 180°
  • Trend Filter: Works best in cycling markets, less effective in strong trends

Key Characteristics:

  • Range: 0° to 360° continuous cycle measurement
  • Smoothing: Uses median filter to reduce phase noise
  • Constraints: Limited to cycles between 6 and 63 bars
  • Best Use: Combined with DC Period for complete cycle analysis

Example Usage

Code examples will be available once the Rust implementation is complete.

Performance Analysis

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