UMG General Concepts

Algorithm: A specific set of rules used to construct technical analysis models on financial instrument charts. UMG utilizes two distinct algorithms, each responsible for building different types of technical analysis models.

Model: A key structural concept in UMG that encompasses a set of elements such as:

1. A segment of the price chart where the algorithm has been successfully applied.
2. A collection of lines constructed on the relevant price chart segment as a result of a complete and successful application of the algorithm.

Model’s Parameters: A collection of values derived from:

1. The price chart segment and the set of lines created by the algorithm.
2. Certain parameters may also be calculated using other previously constructed models.

Point (also known as "Touch"): In the context of an algorithm, a point refers to a specific location on the chart associated with the high or low of a particular bar. Significant extremes or tangent points identified by the algorithm can serve as points (touches).

Significant Extreme: An extremum that possesses a confirming extreme.

Confirming Extreme: An extreme that precedes a significant extreme. In essence, an extreme can only be deemed significant if there is a confirming extreme preceding it.

Absolute Extreme: In the context of algorithms, this refers to a price chart extreme that satisfies the following conditions:

1. It represents the lowest or highest price value in the region between two adjacent absolute extremes. Therefore, absolute extremes are mutually defining.
2. It is a significant extreme.

Local Extreme: This is a price chart extreme that:

1. Does not represent the lowest or highest price value in the region between two adjacent absolute extremes.
2. Is a significant extreme.

Points and Touches:

Point is a key element of the model, which is determined in one of the following ways:

- as the high/low of bar on the chart; - as a specific bar where the price has formed an absolute extreme - forecast of the level and/or time obtained as the intersection of models AL and TL.

Touch is the place where the price exactly matches the value of the model line. The touch may be or may not be a Point.