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.

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 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 may serve as reference Points for building model lines. The Touch may be or may not be a Point.

Extremes

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. It is a significant extreme.