As explained by Mladen:
General:
In his article “Correlation as A Trend Indicator” in May 2020 issue of TASC, author John Ehlers introduces a new trend indicator that is based on the correlation between a security’s price history and the ideal trend: a straight line. He describes methods for using the indicator to not only identify the onset of new trends but to identify trend failures as well.
Recommendations:
Ehlers describes a rather strange way of using it (like using asymmetric threshold for buy and sell, in which case it is clear that he was fitting the indicator to the chart - which is never a good idea, hence
- Use 0 line as a criterion for a "trend" (short or long)
- Use crosses of short and long values as a signal to buy or sell