LNRSI Multi-Timeframe Indicator¶

Overview¶

The LNRSI (Laguerre Normalized Relative Strength Indicator) combines four distinct "layers of truth" for every candle:

The Four Layers¶

flowchart LR
    A[Price / SPY] --> B[Normalize 0-100]
    B --> C[Fractals Energy Alpha]
    C --> D[Laguerre Smoothing]
    D --> E[Signal Line Cross]

    style A fill:#87CEEB
    style B fill:#5DADE2
    style C fill:#3498DB
    style D fill:#2874A6
    style E fill:#1B4F72,color:#fff

Layer 1: Relative Strength (The "What")¶

We don't just look at price - we look at the Ratio of Asset vs Benchmark (SPY):

Ratio = Stock Price / SPY Price

Why This Matters¶

Key Insight: We want to buy stocks that refuse to go down when the market dips.

Layer 2: Stochastic Normalization (The "Context")¶

We map the Ratio to a 0-100 scale based on the Lookback period:

NormRS = (Ratio - Lowest) / (Highest - Lowest) × 100

The "78 Bar" Rule (Day Trading)¶

Why 78? It tells you if you're at the "cheap" or "expensive" end of today's relative performance, not last week's.

Layer 3: Fractals Energy (The "Market State")¶

This measures the "efficiency" or "choppiness" of the ratio movement:

Fractals Energy = log(Sum of Ranges / Total Range) / log(Length)

Adaptive Behavior¶

This is the secret sauce that prevents whipsaws in choppy markets.

Layer 4: Laguerre Filter (The "Trigger")¶

The Laguerre filter provides zero-lag smoothing of the normalized RS:

L0 := alpha * NormRS + (1 - alpha) * nz(L0[1])
L1 := -(1 - alpha) * L0 + nz(L0[1]) + (1 - alpha) * nz(L1[1])
L2 := -(1 - alpha) * L1 + nz(L1[1]) + (1 - alpha) * nz(L2[1])
L3 := -(1 - alpha) * L2 + nz(L2[1]) + (1 - alpha) * nz(L3[1])

Signal = (L0 + 2*L1 + 2*L2 + L3) / 6

Why Laguerre?¶

Layer 5: Multi-Timeframe Confluence (The "Probability Multiplier")¶

We check the same math on multiple timeframes:

Key Insight: A 5-minute breakout where the 15m, 1H, and Daily are ALREADY bullish is a freight train.

The Zones¶

Zone Breach Signals¶

Trading Strategy¶

Entry Checklist (Long/Calls)¶

• 3+ timeframes show BULL (ideally all 4)
• Background is GREEN (total confluence)
• Zone breach: Laguerre crosses above 0.2 OR above 0.8
• Candle closed (never enter mid-candle)
• Blue Line > Orange Signal Line

Position¶

Stop Loss¶

Profit Taking¶

Expert Tips¶

1. Avoid the Morning Fake-out¶

2. Watch for Divergence¶

Divergence means the stock is losing power relative to SPY even though price is up. This is a bull trap.

3. The Benchmark Matters¶

Related Indicators¶

• Quad-Lock Visual Scanner - Rapid watchlist screening
• Momentum Shift 5min MTF - Alternative 5-min setup
• LRSI Momentum Panel - Bottom oscillator panel

Changelog¶