RMSD Deviation Strategy (Adaptive MA Framework)

Root Deviation + Bollinger Bands Strategy is a quantitative trend-following system designed to identify directional bias using statistical deviation and adaptive signal scoring.

This strategy combines two core engines:

• Root Mean Square Deviation (RMSD) framework
• Multi-type Moving Average benchmark system

By measuring price displacement from a dynamically selected average, the model detects expansion phases where momentum is likely to persist.

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🔹 **Signal Architecture**

The strategy supports three independent signal modes:

• Bollinger-style RMSD bands
• For-loop momentum scoring
• Combined probabilistic signal

The combined mode averages both engines to reduce noise and improve directional confidence.

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🔹 **Adaptive Moving Average Engine**

Includes multiple professional-grade averages:

SMA, EMA, WMA, VWMA
DEMA, TEMA, HMA
ALMA, FRAMA, KAMA
JMA, T3, ZLSMA
and more.

This allows traders to tune responsiveness vs stability depending on market regime.

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🔹 **Risk Management Layer**

Built-in controls include:

• ATR-based stop system
• Switch cooldown logic
• Commission and slippage modeling
• Percent-of-equity position sizing

These features help produce more realistic backtests and reduce overtrading.

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🔹 **Design Philosophy**

The strategy is built around a simple idea:

> Markets move in statistically measurable expansions.

Instead of predicting direction, the model reacts to confirmed displacement.

This makes it suitable for:

• Crypto
• Index futures
• Forex
• High-liquidity equities

Works across multiple timeframes.

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⚠️ **Important Notice**

This script is provided for research and educational purposes only.

It is not financial advice.

All trading involves risk.

Past performance does not guarantee future results.

Users are responsible for their own trading decisions.