UMG General Concepts

Algorithm is 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 is a key structural concept in UMG that include 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 is 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.

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

- as a forecast of the level and/or time calculated as the intersection of models lines.

Touch is a specific location on the chart associated with the high or low of a particular bar, through which the model line passes. Significant extremes or tangent points identified by the Algorithm may serve as reference Points for building model lines.

In the other case Touch may be or may not be a Point, but it is the contact of the price with the line, built with the help of previous Touches (Points).

Extremes:

Significant Extreme is a price extreme that has a Confirming extreme.

Confirming Extreme is a price 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 extreme that:

1. Does not represent the lowest or highest price value in the region between two adjacent Absolute Extremes.
2. It is a Significant Extreme.