Hilbert Transform - Instantaneous Trendline

Overview

The Hilbert Transform - Instantaneous Trendline represents a revolutionary approach to creating adaptive moving averages. Unlike traditional moving averages that use fixed periods, this indicator automatically adjusts its smoothing based on the measured dominant cycle period in the market. Using radio-frequency signal processing algorithms, it reduces noise while eliminating the lag inherent in conventional moving averages.

The "instantaneous" aspect refers to the indicator's real-time adaptation to market conditions. When the dominant cycle period is long (trending market), the trendline becomes smoother. When the cycle period is short (cycling market), it becomes more responsive. This adaptive behavior allows traders to use a single indicator effectively in both trending and cycling market conditions.

Interpretation & Trading Signals

Trend Identification:

  • Price Above Trendline: Bullish trend bias, consider long positions
  • Price Below Trendline: Bearish trend bias, consider short positions
  • Slope Direction: Rising slope = uptrend, falling slope = downtrend
  • Slope Steepness: Indicates trend strength and momentum

Trading Strategies:

  • Trend Following: Stay long when price remains above trendline for >50% of cycle period
  • Mean Reversion: Buy when trendline crosses below lagged version (countertrend)
  • Crossover Signals: Price crossing trendline suggests potential trend change
  • Support/Resistance: Trendline acts as dynamic support in uptrends, resistance in downtrends

Key Characteristics:

  • Adaptive Period: Automatically adjusts based on dominant cycle (6-63 bars)
  • Lag Elimination: Near-zero lag through signal processing techniques
  • Noise Reduction: High-pass filter removes low-frequency noise
  • Best Markets: Works optimally in trending conditions, may whipsaw in ranges

Example Usage

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

Performance Analysis

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