Concept
ALMA
ALMA is a Trend concept. The Library holds 3 implementations, each one a working definition you can pull into Quant.
Arnaud Legoux
Top ALMA indicators
3 total
What is ALMA?
ALMA (the Arnaud Legoux Moving Average) is a windowed weighted average introduced by Arnaud Legoux and Dimitrios Kouzis-Loukas in 2009. Its weights follow a Gaussian bell curve laid across the lookback window, with the bell's peak shifted toward the most recent bars. That shape is the whole idea: where a WMA or EMA weights bars in one monotonic decay, ALMA concentrates weight around a chosen point in the window and tapers off on both sides, filtering high-frequency noise while keeping lag modest.
Two parameters shape the bell. Offset (0 to 1, commonly 0.85) slides the peak: toward 1 the average leans on the newest bars and turns faster, toward 0.5 it is smoother but laggier. Sigma (commonly 6) controls the bell's width relative to the window: larger sigma narrows the bell around the peak, smaller sigma spreads weight more evenly across the window. Because ALMA is a finite-window filter with no recursion, it belongs to the windowed FIR family: its output depends only on the last N bars, with no infinite tail of old data as in an EMA.
How to calculate ALMA
ALMA takes three inputs: window length N, offset (default 0.85), and sigma (default 6).
- 1Locate the peak: m = offset × (N - 1), where the bar index i runs from 0 (oldest bar in the window) to N - 1 (newest).
- 2Set the bell's width: s = N / sigma.
- 3Weight each bar: w(i) = exp(-(i - m)² / (2 × s²)), so bars near the peak dominate and bars far from it contribute little.
- 4Output the normalized weighted sum: multiply each of the N prices by its weight, sum the products, and divide by the sum of the weights.
How traders use it
- As a general-purpose overlay smoother sitting between the classic extremes: smoother than an EMA of comparable lag, more responsive than an SMA of comparable smoothness, and tunable in both directions.
- In crossover and price-cross logic, where the offset and sigma dials let the same setup be re-tuned per market instead of switching moving-average types.
- As the centerline of envelopes and bands, where its stability keeps the band structure from twitching on every bar.
- As a smoother for non-price series (oscillator outputs, volume, spreads), where Gaussian-shaped weighting is a standard noise-reduction choice borrowed from signal processing.
ALMA vs similar averages
EMA: An EMA is recursive, so every past bar contributes a decaying amount forever and one length setting fixes its response. ALMA uses a finite window with Gaussian weights, and offset and sigma tune the smoothness-lag balance independently of length.
HMA: Both aim to cut lag. HMA does it with an extrapolative combination of WMAs, which makes it fast but overshoot-prone; ALMA does it by sliding a Gaussian weight peak toward recent bars, which is typically gentler.
Gaussian Filter: The names overlap but the plumbing differs: a Gaussian filter is usually a recursive smoother engineered for a Gaussian-like frequency response, while ALMA applies an explicit Gaussian-shaped weight window with an offset. Similar smooth character, different construction and controls.
Related concepts · Moving-average lineage
Concept family
Trend
100 concepts mapped · 88 in the Library
ALMA FAQ
What do the offset and sigma settings on ALMA control?
Offset positions the peak of the weight bell inside the window: values near 1 emphasize the newest bars (faster, less smooth), values toward 0.5 pull the peak back (smoother, laggier). Sigma sets the bell's width relative to window length: larger sigma concentrates weight tightly around the peak, smaller sigma spreads it out. The published defaults are 0.85 and 6.
Is ALMA better than an EMA or SMA?
It is not a strict upgrade; it is a different weighting scheme with more control. For a given amount of smoothing ALMA often shows less lag than an SMA and less noise than an EMA, but it still lags real turns and still whipsaws in ranges. The extra parameters also add tuning risk: more dials, more ways to curve-fit.
Does ALMA repaint?
A standard ALMA does not: it is computed from the current bar and the previous N - 1 bars only, and once a bar closes its value is fixed. Like any indicator, the value on the live bar moves until that bar closes. Only centered or forward-shifted variants that reference future bars repaint, which is a repaint-safety concern, not a property of ALMA itself.
Build ALMA your way.
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