ColorZeroLAG Moving Average with Deviation-Based Trend Strength
Summary
This indicator combines the ColorZeroLAG moving average with a three-level estimate of trend strength. It uses the standard deviation of the moving average and two configurable thresholds, dK1 and dK2, to determine whether to draw a dot and how large it should be. The dot color shows the current trend direction.
When deviation falls between the thresholds, the indicator displays a small dot; when it exceeds the upper threshold, it displays a larger one. No dot represents the weak level. The document describes the display logic and names a supporting smoothing library, but provides no performance tests or evidence that the strength levels predict future returns. Threshold calibration, the standard-deviation calculation details, and the indicator’s behavior across instruments or timeframes are not discussed, so the visual levels should be treated as an indicator convention rather than validated trading signals.
Key ideas
- The indicator overlays trend-strength dots on a ColorZeroLAG moving average.
- Dot color represents the current trend direction.
- Standard deviation thresholds determine whether dots appear and whether they are small or large.
- No performance evidence or threshold calibration guidance is provided.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.