John F. introuced Decycler in his "Cycle Analytics for Traders" chapter 4 on 2004.
The concept of a decycler is really pretty simple. The cyclic components are removed by the process of cancellation. If the high-pass filter output is subtracted from the input data, the residual only contains the low-frequency components. The decycler is a one-pole filter because the denominator contains only a first-order polynomial. By examination, the decycler must closely follow the input data because there is no difference term in the numerator of the transfer response.
Decycler ---> Decycler Indicator fast line
Trigger ---> Decycler Indicator slow line
Pros and Cons
100% John F. definition translation of original work, even variable names are the same. This help readers who would like to use pine to read his book. If you had read his works, then you will be quite familiar with my code style.
The 36th script for Blackcat1402 John F. Week publication.
In real life, I am a prolific inventor. I have successfully applied for more than 60 international and regional patents in the past 12 years. But in the past two years or so, I have tried to transfer my creativity to the development of trading strategies. Tradingview is the ideal platform for me. I am selecting and contributing some of the hundreds of scripts to publish in Tradingview community. Welcome everyone to interact with me to discuss these interesting pine scripts.
The scripts posted are categorized into 5 levels according to my efforts or manhours put into these works.
Level 1 : interesting script snippets or distinctive improvement from classic indicators or strategy. Level 1 scripts can usually appear in more complex indicators as a function module or element.
Level 2 : composite indicator/strategy. By selecting or combining several independent or dependent functions or sub indicators in proper way, the composite script exhibits a resonance phenomenon which can filter out noise or fake trading signal to enhance trading confidence level.
Level 3 : comprehensive indicator/strategy. They are simple trading systems based on my strategies. They are commonly containing several or all of entry signal, close signal, stop loss, take profit, re-entry, risk management, and position sizing techniques. Even some interesting fundamental and mass psychological aspects are incorporated.
Level 4 : script snippets or functions that do not disclose source code. Interesting element that can reveal market laws and work as raw material for indicators and strategies. If you find Level 1~2 scripts are helpful, Level 4 is a private version that took me far more efforts to develop.
Level 5 : indicator/strategy that do not disclose source code. private version of Level 3 script with my accumulated script processing skills or a large number of custom functions. I had a private function library built in past two years. Level 5 scripts use many of them to achieve private trading strategy.
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Edit: I think the problem occurs whenever the Fast and Slow lines cross twice within two/three bars. I can't see it happen in any other situation as far as I can see. Hope this helps :)