Filtering Trend Envelopes with a Parabolic Weighted Moving Average

Summary

This indicator description explains an option to calculate Trend Envelopes from smoothed or filtered prices rather than raw prices. The selected filter is a parabolic weighted moving average, presented as a fast method for filtering price data. The stated practical effect of enabling smoothing is fewer signals, which may help traders exclude signals they do not want, depending on their trading style.

A smoothing period of 1 or less disables smoothing regardless of the chosen smoothing type, restoring unfiltered price values. The description does not specify the envelope construction, signal rules, parameter selection method, or any test results. It therefore offers a configurable signal-filtering concept, but not enough detail to assess its effectiveness or how it behaves across markets and timeframes.

Key ideas

• Trend Envelopes can use filtered prices instead of raw prices in their calculations.
• The described filter is a parabolic weighted moving average, characterized as fast.
• Using smoothed prices is said to reduce the number of generated signals.
• A smoothing period at or below 1 disables filtering regardless of smoothing type.
• The description gives no signal definition, parameter study, or performance evidence.

Tags

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