Deviation-Scaled Moving Averages with Self-Adjusting Levels

Summary

The document introduces an indicator built from a deviation-scaled moving average, described as an extension of the exponential moving average. It adds self-adjusting levels that can either be recalculated or inherit previously computed values, creating dynamic reference levels intended to filter signals and mark potentially significant areas on a chart. The central idea is that the underlying calculation must support this inheritance behavior for the adaptive levels to work.

The indicator’s main value and its added levels are all calculated using the deviation-scaled moving-average approach. The brief usage guidance proposes treating changes in indicator color as signals. However, the document provides no formula, parameter choices, chart examples, backtest, or performance evidence, and it does not explain how to interpret specific color changes. The signal concept therefore remains underspecified and would need precise rules and testing before it could support a trading system.

Key ideas

• The indicator extends an exponential moving average with deviation scaling.
• Its self-adjusting levels may reuse previously calculated values through an inheritance mechanism.
• The levels are intended to filter signals and provide dynamic reference points.
• The document suggests using color changes as signals but does not define the rules.
• No formula, parameter settings, or performance evidence is included.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.