Arnaud Legoux Moving Average (ALMA)
🔍 What is ALMA?
The Arnaud Legoux Moving Average (ALMA) is a smooth and responsive moving average developed by Arnaud Legoux and Dimitrios Kouzis-Loukas. Unlike traditional moving averages that lag significantly, ALMA is designed to reduce lag while maintaining smoothness — making it ideal for detecting trends with greater precision.
It achieves this through a Gaussian distribution and an offset mechanism, giving traders an edge by highlighting shifts in price momentum faster than classic moving averages.
⚙️ How Does It Work?
ALMA applies a Gaussian filter to price data. It uses three key components:
Window size (period) – how many candles it considers.
Offset – shifts the curve left or right to adjust sensitivity.
Sigma – controls the smoothness.
The result is a moving average that reacts more intelligently to market movements, reducing noise and avoiding the whipsaw effect.
📖 How to Read It
When price is above the ALMA, it suggests a bullish trend.
When price is below the ALMA, it indicates a bearish trend.
A cross above the ALMA may signal a potential buy opportunity.
A cross below the ALMA may signal a potential sell opportunity.
Because of its refined smoothing, ALMA provides clearer trend direction compared to traditional MAs.
🛠️ Best Settings
The default and commonly used settings are:
Period: 9 or 20
Offset: 0.85 (shifts the curve closer to recent data)
Sigma: 6
Traders can tweak these values depending on the market (crypto, forex, stocks) and their timeframe (1H, 4H, Daily).
📊 How to Use It in a Strategy
Example: ALMA Trend-Following Strategy
Set ALMA with a 20-period, offset 0.85, sigma 6.
Enter long when:
Price crosses above the ALMA
Confirmed by volume or RSI
Enter short when:
Price crosses below the ALMA
Confirmed by bearish momentum
ALMA works well in trending markets, especially when combined with momentum indicators like RSI or MACD.
⚠️ Common Mistakes
Using ALMA in a sideways market: Like other trend indicators, ALMA can produce false signals in choppy price action.
Ignoring confirmation: Always use additional indicators or price action to confirm signals.
Over-optimization: Avoid constantly changing offset or sigma just to fit past data — it may reduce real-time effectiveness.
🧠 Final Thoughts
ALMA is a powerful and modern upgrade to traditional moving averages. Its unique smoothing formula helps reduce lag and improve signal accuracy — giving traders clearer insights without the noise. It's especially valuable for short- to medium-term strategies and works well when used with complementary tools.
If you're tired of lagging MAs or noisy charts, give ALMA a try — it just might become your new favorite trend tool.
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