Laguerre RSI (LRSI)

Overview

The Laguerre RSI represents a quantum leap in momentum oscillator design, developed by renowned engineer and trader John Ehlers in his groundbreaking article "Time Warp – Without Space Travel." By applying the sophisticated Laguerre transform to the traditional RSI calculation, this indicator achieves what many thought impossible: significantly reduced lag without sacrificing smoothness, and enhanced responsiveness without increasing false signals. The Laguerre transform essentially "warps" the time coefficients of traditional EMA filters, creating a unique mathematical framework that allows the indicator to react more quickly to price changes while filtering out market noise that plagues conventional oscillators.

What makes the LRSI particularly powerful is its ability to reach the extreme levels of 0 and 1 more frequently than traditional RSI, providing clearer overbought and oversold signals. Unlike the standard RSI which uses levels of 30 and 70, the LRSI operates optimally with thresholds at 0.15-0.20 for oversold and 0.80-0.85 for overbought conditions. This recalibration isn't just cosmetic - it reflects the indicator's enhanced ability to identify true market extremes. When the LRSI flatlines above 0.8, it indicates a powerful uptrend where momentum traders should avoid counter-trend positions. Conversely, readings persistently below 0.2 signal strong downtrends that shouldn't be fought. The indicator's smooth, responsive nature makes it particularly valuable for day traders and swing traders who need reliable signals in fast-moving markets.

Interpretation & Trading Signals

Example Usage

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