Hurst ALMA Channels With Signals [UAlgo]

2023年12月20日

In the pursuit of identifying potential market pivots, a single measurement of Average True Range (ATR), may not provide sufficient information on its own, lacking directional insights. However, by employing a Moving Average (MA), specifically the Arnaud Legoux MA with Hurst C. calculation applied, a potential trading range can be visualized, taking recent volatility into account.



The underlying assumption is that if volatility remains relatively stable and the price extends beyond this ATR-derived range, there is a high probability of a reversion to the mean. At this point, it is postulated that available buying or selling pressure is depleted, prompting a pivot back to the mean.

To enhance the analysis, multiple MAs of different lengths are plotted. While individual MAs alone may not convey substantial information, observing reversions to the mean between MAs of varying lengths becomes insightful. Shorter MAs may oscillate above or below longer MAs, returning to the mean and creating crossover patterns.

The key innovation lies in combining these two concepts. By utilizing three different length MAs with corresponding ATR lengths, a dynamic system is established. The smallest band fluctuates within the medium band, and the medium band oscillates within the large band, creating approximate short, medium, and long trading ranges relative to the MAs.

For instance, in a theoretical scenario, when the smallest band reaches the upper limit of the medium band, and simultaneously, the medium band reaches the upper limit of the large band, and the price surpasses all of them, there is a heightened probability of a market reversal.

It's important to emphasize that these observations are based on historical volatility patterns and are subject to adjustments based on specific market conditions and the chosen instrument.


The developed indicator generates three distinct signal types, each providing valuable insights into potential market pivots without disclosing specific parameters:

Large Triangles : Representing a high-probability pivot, this signal occurs when the price surpasses all bands, either at the top or bottom. It suggests an extreme point where a pivot is likely.

Medium Triangles : Indicating a notable market event, this signal emerges when the price exceeds both the small and medium bands but falls short of surpassing the large band. Additionally, the small band must have exceeded the medium band. This configuration points to a significant market move with a potential for reversion.

Small Triangles : This signal is observed when the price surpasses both the small and medium bands, yet does not breach the large band. Notably, the small band should not have exceeded the medium band. This signal type suggests a distinctive market condition where a pivot may be imminent.



These triangle signals are designed to identify key points in the market where historical patterns indicate a likelihood of reversion or significant price movement. It is crucial to note that the interpretation of these signals should be adapted to specific market conditions and instruments.

Good luck to you all !

11月19日

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