The Digital PCCI Filter is a specialized technical analysis tool designed to isolate specific market movements by filtering out background "noise." Instead of simply following the price as it moves, this script uses a sophisticated mathematical approach to identify and subtract underlying trends or signals, leaving behind a refined data set for the trader to analyze.
Core Methodology
The logic of this indicator relies on a pre-defined mathematical weight system (a coefficient array). You can think of this as a complex "recipe" where each past price point is assigned a specific level of importance.
When the script runs, it performs the following steps:
- Weighted Analysis: For every moment in time, the script looks back at a specific sequence of previous closing prices.
- Response Calculation: It multiplies each of those past prices by their corresponding weight from the internal "recipe." By summing these values together, the script calculates a "response"—essentially a predicted or smoothed value based on historical patterns.
- The Subtraction Logic (The Filter): This is the most critical part of the script. To produce the final line you see on your chart, the script takes the actual current price and subtracts the calculated response.
What this means for the user
By subtracting the "response" from the actual price, the indicator effectively strips away the standard market behavior captured by the weighting system. What remains (the result displayed in red) represents the "residual" movement—the deviations or specific signals that the filter deems significant enough to highlight.
Key Technical Characteristics
- Smooth Filtering: Because it uses a long sequence of weights, the indicator is designed to be highly deliberate, focusing on underlying structural changes rather than erratic, moment-to-moment price fluctuations.
- Buffer Requirement: The script requires a minimum amount of historical data (specifically 106 bars) before it can begin providing accurate calculations, ensuring that the mathematical "recipe" has enough history to work with properly.
- Visual Output: The result is displayed in a separate window below your main chart, providing a clean visual representation of the filtered price action.
Price Data Components
Miscellaneous
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PCCI-as a filter
//+------------------------------------------------------------------+
//| Digital PCCI Filter |
//| Copyright (c) Sergey Iljukhin, Novosibirsk. |
//| mailto:sergey@tibet.ru http://fx.qrz.ru/ |
//+------------------------------------------------------------------+
#property copyright "Copyright (c) 2005, Sergey Iljukhin, Novosibirsk"
#property link "mailto:sergey@tibet.ru"
// --- Parameters: P1=38, D1=28, A1=40
// --- P2=52, D2=31, A2=40, Ripple=0.08, Delay=0
// --- Order [Auto]=106, Calculate method=2
#property indicator_separate_window
#property indicator_buffers 1
#property indicator_color1 Red
//---- buffers
double FilterBuffer[];
double Values[] = {
+0.1177628838235,
+0.1170077388431,
+0.1147601209029,
+0.1110729054065,
+0.1060324421434,
+0.0997560988008,
+0.0923890376402,
+0.0841000389219,
+0.0750766919597,
+0.0655202662708,
+0.0556401583046,
+0.0456482572592,
+0.0357530528012,
+0.02615415804227,
+0.01703731282680,
+0.00856960311288,
+0.000895555708556,
-0.00586627422066,
-0.01162552971203,
-0.01632152444323,
-0.01992414580732,
-0.02243335117589,
-0.02387813894599,
-0.02431430200598,
-0.02382176331725,
-0.02250140527159,
-0.02047075493180,
-0.01786000052706,
-0.01480733499641,
-0.01145463232852,
-0.00794304696010,
-0.00440829083275,
-0.000977238472653,
+0.002235823933755,
+0.00513191787383,
+0.00762972457736,
+0.00966747623918,
+0.01120310303187,
+0.01221499285956,
+0.01270127547603,
+0.01267881242200,
+0.01218165493397,
+0.01125820035359,
+0.00996954486984,
+0.00838605323109,
+0.00658436935337,
+0.00464439195323,
+0.002645759417416,
+0.000666068159555,
-0.001222776729259,
-0.002956488520058,
-0.00448011021214,
-0.00574988855361,
-0.00673332989225,
-0.00741117882839,
-0.00777644547070,
-0.00783388153265,
-0.00759966748743,
-0.00709931269272,
-0.00636769053766,
-0.00544559940274,
-0.00437852874428,
-0.00321542503890,
-0.002005580069262,
-0.000798178859997,
+0.000361723322003,
+0.001433101593600,
+0.002380073229874,
+0.00317453700490,
+0.00379492177651,
+0.00422884523807,
+0.00447038314289,
+0.00452100306476,
+0.00439082398691,
+0.00409492037175,
+0.00365528338580,
+0.003096238149856,
+0.002446112685573,
+0.001736376831290,
+0.000996103380422,
+0.0002557237615143,
-0.000458282529397,
-0.001119581482823,
-0.001704893115208,
-0.002199032152313,
-0.002586916898054,
-0.002861741841535,
-0.003018651749353,
-0.003060101508137,
-0.002997112675297,
-0.002834938217095,
-0.002589089321820,
-0.002272072078644,
-0.001902835889698,
-0.001502872027811,
-0.001077466851623,
-0.000655481642188,
-0.0002511660753314,
+0.0001137882502083,
+0.000426098842482,
+0.000714775119642,
+0.000916639580735,
+0.001063116482197,
+0.001143113996535,
+0.001159315803654,
+0.00922554212244
};
//+------------------------------------------------------------------+
//| Digital filter indicator initialization function |
//+------------------------------------------------------------------+
int init()
{
string short_name;
//---- indicator line
SetIndexStyle(0,DRAW_LINE);
SetIndexBuffer(0,FilterBuffer);
SetIndexDrawBegin(0,106);
//----
return(0);
}
//+------------------------------------------------------------------+
//| Digital filter main function |
//+------------------------------------------------------------------+
int start()
{
int i,counted_bars=IndicatorCounted();
double response = 0.0;
//----
if(Bars<=106) return(0);
//---- initial zero
if(counted_bars<106)
for(i=1;i<=0;i++) FilterBuffer[Bars-i]=0.0;
//----
int limit =Bars-106-1;
if(counted_bars>=106) limit=Bars-counted_bars-1;
for (i=0; i<limit; i++)
{
response = 0.0;
for (int k=0; k<ArraySize(Values); k++)
response += Values[k] * iClose(NULL, 0, i+k);
FilterBuffer[i]=iClose(NULL, 0, i) - response;
}
return(0);
}
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