Category: MESA8

Input parameters

Description

The Trend indicator is derived by removing the dominant cycle component from the data, leaving the trend as the other component in a simplified model of the market.  The dominant cycle component is removed by performing a simple moving average over the dominant cycle period on a bar-by-bar basis.  This is the same as any simple moving average except the period of the average changes as the dominant cycle changes.  The result is that the dominant cycle component is completely eliminated by the averaging process.  However, the simple moving average causes a lag (a lateral translation) of half the dominant cycle period.  This lateral translation is compensated by adding a vertical translation as half the momentum across the dominant cycle.  The result is a zero lag instantaneous trendline that runs as an average along the cyclic variation of the price.  The Tune parameter adjusts the dominant cycle period relative to its measured value.  The Delta parameter is the bandwidth of  a bandpass filter in terms of +/- percent of the center period.  A smaller number gives a narrower bandwidth to eliminate extraneous cycle components and a larger number give a wider bandwidth to improve responsiveness to transients.