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Kc  · 09/01/22

ALMA / AltcoinTrading.NET glossary

What does ALMA stand for in crypto trading - Arnaud Legoux Moving Average
Altcoin Trading Blog

Key Points / ALMA

  1. ALMA is short for the Arnaud Legoux Moving Average

  2. ALMA gives better signal to noise ratio than SMA or EMA

  3. ALMA is great for scalping (bot or manual) as short-term support/resistance

  4. Tools for ALMA: #cryptowatch #tradingview 

What is Arnaud Legoux Moving Average (ALMA)

In trading jargon, ALMA means Arnaud Legoux Moving Average. ALMA is a charting tool popular among stock and crypto traders.

ALMA is a moving average that reduces the noise of small price fluctuations by averaging the price from both directions - from past to present and the other way too.

In mathematical terms, it uses the shape of a normalized distribution (kind of like the bell curve).

What that does in practice is it lessens the time lag that all moving averages have, due to being averaged over lengthy time periods.


How to trade ALMA

  • Use it as the faster MA. The ALMA indicator lags less, which means it can be used as the faster MA for your crossovers. This is a strategy that can be easily automated and with proper settings will give better results than using plain moving averages.

  • As a confirmation of oscillators. The ALMA can also confirm overbought or oversold conditions signalled by oscillators like StochRSI or Inverse Fisher RSI. As the ALMA always sticks close to the price, you can confirm your levels just by seeing if it’s above the price or below. In an overbought market with ALMA over the price, you’ve got a sell signal.

  • Use it for scalping. I pity anyone who wants to do this manually but in sideways markets you can scalp the crossovers of ALMA with price.

Best Tools for TA Trading in Crypto

Read our list of tools for crypto traders for more free and freemium options.

Ichimoku Cloud for Crypto Trading - Ichimoku cloud strategies for crypto: Full indicator tutorial, including the controversial topic - Does it make sense to tweak Ichimoku Cloud settings for crypto trading?
5 Questions To Ask Yourself Before Investing In NFTs - NFTs are quite the financial buzz these days, with a growing number of people investing in them. But before you join in, read this article on questions to ask.
Divergences in Crypto Trading (Divergence Cheat Sheet inside) - Divergence is a disagreement between price and an oscillating indicator such as MACD or RSI. It is not strong enough an indicator to enter a position, but it gives an idea of the state of the market.
Fulcrum Bottom - Fulcrum bottom has been talked about a lot lately thanks to mentions in Peter Brandt's reports. Describing it as 'head & shoulders except at the bottom' is not quite cutting it though.
Thoughts on Reversals and Psychology - Bottoming process, just as any other market reversal, is strongly influenced by psychology.
Wyckoff trading method for ranging markets - Fully reworked primer on ranging crypto markets. Includes Wyckoff method for market phases and recommended TradingView scripts.