Percentage-Threshold Triangular Moving Average Stair-Step for Trend Detection

Summary

This indicator holds a step-like value based on a triangular moving average (TMA). It updates the held value only when the TMA moves above or below it by a specified percentage; otherwise, the previous value remains. This creates a smoothed staircase that filters smaller fluctuations. The example parameters are a 1% threshold and a 100-period TMA on daily data.

A second line is a simple moving average of the staircase, intended as a trend signal. The author suggests that two flat lines may indicate a range-bound market and that the indicator could be used within trend-following strategies. The document provides the calculation logic and an interpretation, but no backtest, market examples, or performance evidence. It does not define entry, exit, or risk rules, and the suggested ranging-market interpretation should be tested across instruments and timeframes.

Key ideas

• The staircase changes only when the triangular moving average crosses a percentage threshold from its previous held value.
• A simple moving average of the staircase serves as a companion trend signal.
• The example uses a 1% threshold, a 100-period triangular average, and a 30-period signal average.
• The author interprets two flat lines as a possible sign of a ranging market.
• No empirical testing or complete trading rules are provided.

Tags

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