T-Step LSMA: Adaptive Trend Estimation and Directional Signals

Summary

T-Step LSMA is a trend indicator that smooths price, adapts a step-like baseline to price movement, and fits a least-squares line to that baseline. Its efficiency-ratio term and cumulative movement determine how readily the baseline advances, while a correlation and relative-volatility adjustment produces the LSMA estimate. A no-smoothing option plots the step baseline instead. The direction of baseline changes defines an up or down state, which drives alerts and the included long or short strategy entries.

The document supplies indicator logic, configurable length and smoothing inputs, and BTC/USDT futures backtest settings, but no performance evidence or evaluation. The code switches direction when the step baseline changes, so signals depend on the selected lookback and can change as market behavior shifts. It does not describe transaction costs, position sizing, or explicit stop management, leaving practical trading risks and robustness unassessed.

Key ideas

• The indicator smooths price and builds an adaptive step baseline using an efficiency measure.
• A correlation and volatility adjustment maps the baseline into a least-squares moving-average estimate.
• Changes in baseline direction produce alerts and long or short entry signals.
• The source provides no performance results or detail on costs, sizing, or stop management.

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