Coral Filter

The Coral Filter – a.k.a The Coral Trend Indicator – is a linear IIR filter and widely popular amongst FOREX traders. As the name implies, it is commonly used as a trend filter in combination with other indicators.

Indicator Description

The Coral Filter, aka the Coral Trend Indicator is a linear combination of moving averages, all obtained by a triple or higher order exponential smoothing. The indicator comes with a trend indication which is based on the normalized slope of the plot.

The current trend is displayed as paint bars; up, down or flat. By adjusting the neutral threshold parameter, one may define the range of slopes that will render a flat trend.

Therefore, with a neutral threshold parameter of 0, the neutral state will be eliminated and the indicator will only plot up or down trends.

The Coral Trend Indicator is mainly used as a filter. When prices move above the filter, short positions are blocked and vice versa. This basic approach may be refined by further considering the normalized slope. If the slope trend is up, it’s long only, whereas a slope trend which is down is short only. If the slope is flat, both long and short scenarios are considered.

Strategy builder:  The Coral Filter trend information is exposed as public data series and can be accessed by the strategy builder as:

  • uptrend = 1
  • downtrend = -1
  • neutral trend = 0

 Market analyzer:  The Coral Filter has a separate market analyzer column that may be used to display the current trend.

The indicator is available for NinjaTrader 8.