Uhl Corrected Moving Average and Corrected Trend Step Crossover

Summary

This document explains a crossover indicator built from two adaptive averages: the Corrected Moving Average (CMA) as the slower line and the Corrected Trend Step (CTS) as the faster line. Both use a rolling variance as a threshold to adjust how much new information enters each value. The CMA compares a simple moving average with its previous output; the CTS compares price with its previous output.

When the squared difference is below the variance threshold, the smoothing weight is zero and the average holds its prior value. When the difference exceeds the threshold, the weight rises according to the excess distance, making the line more responsive. The author says this design is intended to reduce crossover signals during sideways markets and illustrates the system with a chart, but provides no quantified performance test. The lookback length controls filtering, while a multiplier scales the variance threshold. The explanation presents an indicator concept, not validated trading rules; it does not establish profitability or discuss execution, risk, or instrument-specific behavior.

Key ideas

• The CMA adapts a simple moving average using the squared gap from its previous value and rolling variance.
• The CTS applies similar logic to price, making it the faster line in the crossover pair.
• When the squared gap is below the variance threshold, each adaptive average holds its prior value.
• The author presents sideways-market signal reduction as a design goal, without quantified performance evidence.
• Increasing the lookback length or variance multiplier increases filtering.

Tags

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