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Arnaud Legoux Trend Aggregator | Lyro RS

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Arnaud Legoux Trend Aggregator

Introduction
Arnaud Legoux Trend Aggregator is a custom-built trend analysis tool that blends classic market oscillators with advanced normalization, advanced math functions and Arnaud Legoux smoothing. Unlike conventional indicators, ๐“๐“›๐“ฃ๐“ aggregates market momentum, volatility and trend strength.


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Signal Insight
The ๐“๐“›๐“ฃ๐“ line visually reflects the aggregated directional bias. A rise above the middle line threshold signals bullish strength, while a drop below the middle line indicates bearish momentum.

Another way to interpret the ๐“๐“›๐“ฃ๐“ is through overbought and oversold conditions. When the ๐“๐“›๐“ฃ๐“ rises above the +0.7 threshold, it suggests an overbought market and signals a strong uptrend. Conversely, a drop below the -0.7 level indicates an oversold condition and a strong downtrend.

When the oscillator hovers near the zero line, especially within the neutral ยฑ0.3 band, it suggests that no single directional force is dominatingโ€”common during consolidation phases or pre-breakout compression.


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Real-World Example
Usually ๐“๐“›๐“ฃ๐“ is used by following the bar color for simple signals; however, like most indicators there are unique ways to use an indicator. Letโ€™s dive deep into such ways.

The market begins with a green bar color, raising awareness for a potential long setupโ€”but not a direct entry. In this methodology, bar coloring serves as an alert mechanism rather than a strict entry trigger.

The first long position was initiated when the ๐“๐“›๐“ฃ๐“ signal line crossed above the +0.3 threshold, suggesting a shift in directional acceleration. This entry coincided with a rising price movement, validating the trade.

As price advanced, the position was exited into cashโ€”not reversed into a shortโ€”because the short criteria for this use case are distinct. The exit was prompted by ๐“๐“›๐“ฃ๐“ crossing back below the +0.3 level, signaling the potential weakening of the long trend.

Later, as ๐“๐“›๐“ฃ๐“ crossed below 0, attention shifted toward short opportunities. A short entry was confirmed when ๐“๐“›๐“ฃ๐“ dipped below -0.3, indicating growing downside momentum. The position was eventually closed when ๐“๐“›๐“ฃ๐“ crossed back above the -0.3 boundaryโ€”signaling a possible deceleration of the bearish move.

This logic was consistently applied in subsequent setups, emphasizing the role of ๐“๐“›๐“ฃ๐“โ€™s thresholds in guiding both entries and exits.


Framework
The Arnaud Legoux Trend Aggregator (ALTA) combines multiple technical indicators into a single smoothed signal. It uses RSI, MACD, Bollinger Bands, Stochastic Momentum Index, and ATR.

Each indicator's output is normalized to a common scale to eliminate bias and ensure consistency. These normalized values are then transformed using a hyperbolic tangent function (Tanh).

The final score is refined with a custom Arnaud Legoux Moving Average (ALMA) function, which offers responsive smoothing that adapts quickly to price changes. This results in a clear signal that reacts efficiently to shifting market conditions.

โš ๏ธ WARNING โš ๏ธ: THIS INDICATOR, OR ANY OTHER WE (LYRO RS) PUBLISH, IS NOT FINANCIAL OR INVESTMENT ADVICE. EVERY INDICATOR SHOULD BE COMBINED WITH PRICE ACTION, FUNDAMENTALS, OTHER TECHNICAL ANALYSIS TOOLS & PROPER RISK. MANAGEMENT.

Penafian

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