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Co-author of the Zero Lag strategy

Ric Way

Ric Way co-authored 'Zero Lag (Well, Almost)' with John Ehlers in the November 2010 issue of Technical Analysis of Stocks & Commodities. The article supplied the EasyLanguage code for the error-correcting filter and its trading strategy, tested on Microsoft.

What they argue

  • Removing a selected amount of lag from an EMA gives earlier crossover signals while keeping most of the smoothing.
  • A threshold on the filter's remaining error should screen out weak crossings to cut whipsaw trades.

Sources

Ehlers & Way, Zero Lag (Well, Almost) (PDF)Stocks & Commodities V.28:11, Zero Lag (Well, Almost)

Summaries are Be The Puck's paraphrase of public material. Be The Puck has no affiliation with the people listed.

Ehlers and Way's Zero Lag (error-correcting EMA) crossover

Rule and full record

Trend following · daily · with John F. Ehlers

An exponential average with an error-correcting term that pulls it toward price and removes most of the lag. Buy when it crosses above the ordinary average, but ignore crossings where the corrected line is hugging the price.

Calls right30%50,688 closed calls on 377 stocks.
Beat buy and hold (Sharpe)84 of 375On raw return: 72 of 375.
In right now152 of 377As of the Oct 13, 2026 close.

Best risk-adjusted results against buy and hold:

SUPXOUTAPPOUTRKLBOUTETHOUTLACOUTBTCINSTHHINGPROINEOSEOUTBYDOUTBTEINCURAOUTAll 377 stocks →

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