Continuation Index [DCAUT]

█ Continuation Index [DCAUT]

📊 OVERVIEW

Continuation Index (CI) is an advanced trend analysis indicator developed by John F. Ehlers. This indicator provides early warning signals for trend onset, continuation, and exhaustion, with values oscillating between -1 and +1 to offer clear trend state identification for traders.

Based on the article TASC 2025.09 "Trend Onset And Trend Exhaustion - The Continuation Index" by John F. Ehlers.

💡 CORE VALUE

Unlike traditional trend indicators, the Continuation Index provides:
- Advanced dual-filter architecture (Ultimate Smoother + Laguerre Filter)
- Inverse Fisher Transform for enhanced signal-to-noise ratio
- Adaptive gamma parameter allowing market-specific tuning
- Binary state output (+1/-1) eliminating interpretation ambiguity

🎯 CONCEPTS

Signal Interpretation

• CI > 0.5: Strong bullish trend continuation - consider holding/adding long positions
  
• CI = +1: Maximum bullish signal - strong uptrend in progress
  
• CI < -0.5: Strong bearish trend continuation - consider holding/adding short positions
  
• CI = -1: Maximum bearish signal - strong downtrend in progress
  
• CI near 0: Neutral zone - trend uncertain, wait for clear signals
  
• Brief pullbacks from extreme states: Potential reentry opportunities in trend direction
  

Primary Applications

• Trend Onset Detection: Early warning signals for trend initiation
  
• Trend Exhaustion Signals: Identify potential trend reversals
  
• Position Management: Clear binary states for entry/exit decisions
  
• Market Timing: Adaptive filtering reduces false signals
  

📋 PARAMETER SETUP

• Source: Data source for calculation (default: close)
  
• Length: The calculation length for the filters (default: 40, min: 1)
  
• Gamma: Controls the phase response of the Laguerre filter. Smaller values increase responsiveness (default: 0.8, range: 0.0-1.0)
  
• Laguerre Order: The order of the Laguerre filter, which directly affects its lag (default: 8, range: 1-10)
  

📊 COLOR CODING

• Green: CI > 0.5 - Bullish trend continuation
  
• Red: CI < -0.5 - Bearish trend continuation
  
• Gray: Neutral zone - Trend unclear