The Laguerre RSI Metatrader 4 forex indicator is a very popular trend oscillator used in many strategies and systems.
It was authored by John Ehlers as a technique he used to “warp” the time coefficients of a regular EMA filter, thereby resulting in a quicker response.
The Laguerre RSI indicator is known to behave in the same way as the classic RSI.
In addition, the Laguerre RSI indicator gets traded similarly to the RSI.
Buying is generally advised when the indicator’s value falls below a certain threshold, and exiting the trade when it surges above a threshold.
The medium purple line of the Laguerre RSI indicator runs between the marked zero lower limit and “1” upper limit.
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Indicator Chart (EUR/USD M30)
The EUR/USD M30 chart below displays the Laguerre RSI Metatrader 4 forex indicator in action.
Basic Trading Signals
Buy Signal: Go long when the medium purple line of the Laguerre RSI Metatrader 4 forex indicator breaks back above the 0.15 level from below.
Sell Signal: Go short when the medium purple line of the Laguerre RSI Metatrader 4 forex indicator dips back below the 0.75 level from above.
Exit buy trade: Close all buy orders if while a bullish trend is ongoing, the medium purple line of the Laguerre RSI indicator dips below the 0.75 level.
Exit sell trade: Close all sell orders if while a bearish trend is running, the medium purple line of the Laguerre RSI indicator surges above the 0.15 level.
Tips: The Laguerre RSI indicator is a trend oscillator indicator that can be used to confirm signals to enter the market, as well as exit it.
You’ll also stand to enjoy fewer false positives on this indicator than the traditional RSI.
Laguerre RSI Indicator + Ehlers Histogram Scalping Strategy for M1 and M5
This scalping strategy combines the Laguerre RSI Metatrader 4 Forex Indicator with the Ehlers Histogram Forex Oscillator for MT4.
It is designed for very short-term trading on M1 and M5 charts.
The strategy captures quick market moves by confirming momentum with the Laguerre RSI and trend direction with the Ehlers Histogram.
This approach is suitable for scalpers who prefer fast entries and exits during high volatility periods.
Buy Entry Rules
- Wait for the medium purple line of the Laguerre RSI to break back above the 0.15 level from below.
- Confirm that the Ehlers Histogram shows blue bars, indicating a buy trend.
- Enter a long position once both conditions are met.
- Set the stop loss a few pips below the recent swing low.
- Take profit at a fixed 5–15 pip target or when the Laguerre RSI dips back below 0.15, or the Ehlers Histogram turns red.
Sell Entry Rules
- Wait for the medium purple line of the Laguerre RSI to dip back below the 0.75 level from above.
- Confirm that the Ehlers Histogram shows red bars, indicating a sell trend.
- Enter a short position once both conditions are met.
- Set the stop loss a few pips above the recent swing high.
- Take profit at a fixed 5–15 pip target or when the Laguerre RSI rises above 0.75, or the Ehlers Histogram turns blue.
Advantages
- Fast and precise signals suitable for scalping on M1 and M5 charts.
- Combines momentum and trend confirmation for higher probability trades.
- Helps identify short-term trend reversals quickly.
- A simple strategy makes it easy to monitor multiple pairs at once.
Drawbacks
- Scalping on M1 and M5 can be stressful and mentally demanding.
- Small price fluctuations can trigger stop losses frequently.
- Requires fast execution and a reliable broker to avoid slippage.
- Signals may be less effective during low liquidity periods.
- Not ideal for beginners due to the need for quick decision-making and tight risk management.
Case Study 1
On EURUSD M1, the Laguerre RSI broke above 0.15 after a minor retracement, and the Ehlers Histogram showed blue bars.
A long position was entered with a stop loss 3 pips below the swing low.
Within 8 minutes, the price moved 10 pips upward, and the trade was closed when the Laguerre RSI dipped below 0.15.
The setup captured a quick and precise scalp.
Case Study 2
On GBPUSD M5, the Laguerre RSI fell below 0.75 after a small rally, while the Ehlers Histogram displayed red bars.
A short trade was taken with a stop loss 5 pips above the swing high.
Price dropped steadily, and the position was closed after a 12-pip move when the histogram started to show blue bars.
The strategy captured a clear intraday move with minimal risk.
Strategy Tips
- Focus on currency pairs with strong volatility to improve signal reliability.
- Combine this strategy with a higher time frame trend filter to avoid trading against the major trend.
- Consider scaling out of trades by taking partial profits to secure gains while letting the rest run.
- Use tight stop losses to protect against sudden reversals on M1 and M5 charts.
- Keep track of trading performance in a journal to refine entry and exit timing.
- Avoid trading during low activity periods when signals are more likely to be false.
- Practice patience and only take trades that meet both Laguerre RSI and Ehlers Histogram conditions.
- Adjust trade size according to the volatility of the pair and the time frame being traded.
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Download the “laguerre-rsi.ex4” Metatrader 4 indicator
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart window indicator
Customisation options: Variable (gamma), width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Type: trend
