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, Touches and Breakdowns:

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 (for example Points 1,2,3,3',4,5 of a model) ;

- as a specific bar where the price has formed an Absolute Extreme (for example Real Point 6);

- as a forecast of the level and/or time calculated as the intersection of models lines (for example Calculated Point 6, Sacral Point, Supposed Point 6).

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

In the other case (Touch isn't a model's Point) it is the contact of the price with model's line (but not crossing of the line by the price).

Breakdown is a location where there price crossed (not just touched) the model's line for the first time.

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 satisfies the following conditions:

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

Definition of a Model as "Half-Trend" or "From the Beginning of the Trend"

For main models other than EAM, the program sequentially checks bars from right to left (i.e., into the past) from the bar containing t.1 until one of the following events occurs:

1. A price level intersection of t.2 is found.
2. A price level intersection of t.1 is found.

- If the program checks 50 bars before t.1 of the model, and neither intersection is found, the model is considered a model from the beginning of the trend.

- If the program checks less than 50 bars before t.1 of the model and reaches the initial bar of the chart without finding the desired intersection, the model is considered a model from the beginning of the trend.

- If a t.1 intersection is found before a t.2 intersection, the model is considered a trend model.

- If a t.2 intersection is found before a t.1 intersection, the model is considered a model from the beginning of the trend.