Extra indicators
ZLEMA: Zero-Lag Exponential Moving Average
An exponential moving average that removes part of its own delay, so it turns sooner with the price.
The idea in plain words
Every moving average lags because it looks back. ZLEMA estimates how far the price has moved during that lag and adds it back before averaging, which pulls the line forward.
How it is calculated
Take the close, add the difference between the close and the close (N−1)/2 candles ago, then smooth the result with an ordinary EMA of N candles.
lag = ⌊(N − 1) ÷ 2⌋
ZLEMA = EMA(2 × close − close[lag], N)How to use it
- As a faster trend line for entries and trailing stops.
- In crossover systems, to get earlier signals than with an EMA.
Drawing conclusions
- ZLEMA overshoots a little after sharp moves: that is the price of having less lag.
Example
EURUSD M15: the EMA(21) is still falling when the ZLEMA(21) has already turned up two candles after the low; a trader watching ZLEMA notices the turn earlier.
Prices in examples are illustrative.
Watch out for
- Faster lines give more false turns in sideways markets.
A little history
Introduced by John Ehlers and Ric Way in 2010 ("Zero Lag (Well, Almost)", Technical Analysis of Stocks & Commodities).
Educational content only. No indicator or pattern predicts the future, and nothing here is investment advice.