Using DecEMA Standard Deviation Dots to Show Trend Strength

Summary

This indicator description explains a way to display trend strength on a DecEMA moving average using standard deviation. Two input thresholds divide the reading into strength levels: when the standard deviation falls between the lower and upper thresholds, a small colored dot appears; when it exceeds the upper threshold, the dot becomes larger. Dot color indicates the current trend direction. No dot represents the weakest level, a small dot a medium level, and a large dot a strong level.

The indicator is a visual aid for interpreting trend strength, rather than a complete entry or exit system. The description does not specify how the standard deviation is calculated, how the thresholds should be calibrated, or whether the signals have been tested across instruments or market regimes. It also notes a dependency on an external smoothing-algorithms library for its implementation. No backtest, performance comparison, or risk controls are presented, so the dot sizes should not be treated as evidence that a trend will continue.

Key ideas

• The indicator uses standard deviation of DecEMA to classify trend strength.
• A reading between two thresholds produces a small dot, while a reading above the upper threshold produces a larger dot.
• Dot color represents trend direction, and no dot indicates the weakest strength level.
• The description provides no calibration guidance or evidence of predictive performance.
• Implementation depends on an external smoothing-algorithms library.

Tags

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