ZLEMA Trend Index 2.0

ZTI — ZLEMA Trend Index 2.0 (0–1000)

Overview

Price Mapped ZTI v2.0 - Enhanced Zero-Lag Trend Index.

This indicator is a significant upgrade to the original ZTI v1.0, featuring enhanced resolution from 0-100 to 0-1000 levels for dramatically improved price action accuracy. The Price Mapped ZTI uses direct price-to-level mapping to eliminate statistical noise and provide true proportional representation of market movements.

Key Innovation: Instead of statistical normalization, this version maps current price position within a user-defined lookback period directly to the ZTI scale, ensuring perfect correlation with actual price movements. I believe this is the best way to capture trends instead of directly on the charts using a plethora of indicators which introduces bad signals resulting in drawdowns. The RSI-like ZTI overbought and oversold lines filter valid trends by slicing through the current trading zone. Unlike RSI that can introduce false signals, the ZTI levels 1 to 1000 is faithfully mapped to the lowest to highest price in the current trading zone (lookback period in days) which can be changed in the settings. The ZTI line will never go off the beyond the ZTI levels in case of extreme trend continuation as the trading zone is constantly updated to reflect only the most recent bars based on lookback days.


Core Features

✅ 10x Higher Resolution - 0-1000 scale provides granular movement detection
✅ Adjustable Trading Zone - Customizable lookback period from 1-50 days
✅ Price-Proportional Mapping - Direct correlation between price position and ZTI level
✅ Zero Statistical Lag - No rolling averages or standard deviation calculations
✅ Multi-Strategy Adaptability - Single parameter adjustment for different trading styles

Trading Zone Optimization

📊 Lookback Period Strategies

Short-term (1-3 days):

• Ultra-responsive to recent price action
  
• Perfect for scalping and day trading
  
• Tight range produces more sensitive signals
  

Medium-term (7-14 days):

• Balanced view of recent trading range
  
• Ideal for swing trading
  
• Captures meaningful support/resistance levels
  

Long-term (21-30 days):

• Broader market context
  
• Excellent for position trading
  
• Smooths out short-term market noise
  

⚡ Market Condition Adaptation

Volatile Markets: Use shorter lookback (3-5 days) for tighter ranges
Trending Markets: Use longer lookback (14-21 days) for broader context
Ranging Markets: Use medium lookback (7-10 days) for clear boundaries

🎯 Timeframe Optimization

• 1-minute charts: 1-2 day lookback
  
• 5-minute charts: 2-5 day lookback
  
• Hourly charts: 7-14 day lookback
  
• Daily charts: 21-50 day lookback
  

Trading Applications

Scalping Setup (2-day lookback):

• Super tight range for quick reversals
  
• ZTI 800+ = immediate short opportunity
  
• ZTI 200- = immediate long opportunity
  

Swing Trading Setup (10-day lookback):

• Meaningful swing levels captured
  
• ZTI extremes = high-probability reversal zones
  
• More stable signals, reduced whipsaws
  

Advanced Usage

🔧 Real-Time Adaptability

• Trending days: Increase to 14+ days for broader perspective
  
• Range-bound days: Decrease to 3 days for tighter signals
  
• High volatility: Shorter lookback for responsiveness
  
• Low volatility: Longer lookback to avoid false signals
  

💡 Multi-Timeframe Approach

• Entry signals: Use 7-day ZTI on main timeframe
  
• Trend confirmation: Use 21-day ZTI on higher timeframe
  
• Exit timing: Use 3-day ZTI for precise exits
  

🌐 Session Optimization

• Asian session: Shorter lookback (3-5 days) for range-bound conditions
  
• London/NY session: Longer lookback (7-14 days) for trending conditions
  

How It Works

The indicator maps the current price position within the specified lookback period directly to a 0-1000 scale and plots it using ZLEMA (Zero Lag Exponential Moving Average) which has the least lag of the available popular moving averages:

• Price at recent high = ZTI at 1000
  
• Price at recent low = ZTI at 1
  
• Price at mid-range = ZTI at 500
  

This creates perfect proportional representation where every price movement translates directly to corresponding ZTI movement, eliminating the false signals common in traditional oscillators.

This single, versatile indicator adapts to any market condition, timeframe, or trading style through one simple parameter adjustment, making it an essential tool for traders at every level.

Credits

ZLEMA techniques widely attributed to John Ehlers.

Disclaimer

This tool is for educational purposes only and is not financial advice. Backtest and forward‑test before live use, and always manage risk.

Please note that I set this as closed source to prevent source code cloning by others, repackaging and republishing which results in multiple confusing choices of the same indicator.