Adaptive Market Level: Fractal Smoothing and a Deadband Filter
Summary
Adaptive Market Level (AML) classifies market conditions as flat, uptrend, or downtrend. Its description combines fractal smoothing with a discrete filter intended to ignore small price changes. The filter compares a smoothed price movement with a deadband whose threshold is the square of the Dimension setting, scaled by the instrument’s point size. Movement below that threshold is treated as flat. The indicator has two inputs: Period, used in the calculation, and Dimension, which sets movement amplitude in points.
The calculation notes define a smoothed price using a weighted average of the high, low, open, and close, then refer to range-based quantities measured across current and offset periods. However, parts of the displayed conditional calculation are missing, making the precise state transitions and full implementation unclear. The document offers no chart examples, parameter guidance, backtest, or performance evidence. AML is presented as a market-state indicator, not a complete trading strategy, and its smoothing and threshold may delay or suppress signals depending on settings and market conditions.
Key ideas
- AML assigns market conditions to flat, uptrend, or downtrend states.
- It combines fractal smoothing with a threshold filter that ignores movements below a Dimension-based deadband.
- Period and Dimension are the two stated parameters.
- The smoothed input weights open and close more heavily than high and low.
- Parts of the calculation are missing, and the document provides no performance evidence.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.