ALMA (Arnaud Legoux Moving Average)

The Arnaud Legoux Moving Average (ALMA) uses a Gaussian (bell-curve) distribution to weight prices inside the lookback window. By adjusting the offset and sigma parameters, traders can fine-tune both the position of the weight peak and how sharply weights fall off, achieving a unique balance between smoothness and responsiveness.

w_i = exp(-((i - offset × (N-1))^2) / (2 × (N / sigma)^2))
ALMA = sum(w_i × Close_i) / sum(w_i)

• offset shifts the peak of the Gaussian curve (0 = oldest bar, 1 = newest bar).
• sigma controls the width of the bell curve (smaller = narrower, more focused weighting).

• Gaussian weighting — produces a very smooth line with minimal overshoot.
• Tunable lag — adjust offset to move the weight emphasis between old and new prices.
• Low noise — sigma controls how aggressively older data is discounted.

Trend direction

• Price above ALMA — bullish bias.
• Price below ALMA — bearish bias.

Slope

• Rising ALMA slope — strengthening uptrend.
• Falling ALMA slope — strengthening downtrend.
• Flat ALMA — consolidation or range-bound market.

| Parameter | Default | Description | |-----------|---------|-------------| | Period | 9 | Lookback window size | | Offset | 0.85 | Gaussian peak position (0..1). Higher = more weight on recent prices | | Sigma | 6 | Gaussian width. Smaller = sharper curve, more focused |

| Condition | Meaning | |-----------|---------| | close > ALMA(9) | Price is above ALMA — bullish | | close cross_over ALMA(20) | Price reclaims ALMA — potential reversal up | | ALMA(9) cross_over SMA(20) | ALMA crosses above SMA — early momentum shift |

• Default parameters (9, 0.85, 6) work well for most markets.
• Increase sigma for smoother output or decrease for faster reaction.
• ALMA excels at identifying trend direction without the whipsaw common in EMA.
• Compare ALMA to KAMA — both adapt to market conditions but use different mechanisms.