Another little bird asked what's with the backshiftng? Why backshift the SMA lines? Again, I haven't read the original reseach but I do have a hunch why...
The SMA(16), SMA(32), SMA(64) and SMA(128) are very different. Their moving average periods differ by a lot. Without backshifting, these SMAs would rarely cross. But by backshifting 1/2 their period then they come into better alignment and Focal Points occur more frequently.
However, just as in real-life, everything comes with a trade-off. The trade-off with backshifting is that the SMA lines end prematurely and require extrapolation to extend to the end of the chart. Those extensions are not based on price data and are simply extrapolations from where the SMA had ended many bars ago. If market conditions have changed since the SMAs had ended then the SMAs will appear to have no relation to the current price bars. However, according to the theory, the TargetPrice may still be good. That's where the Fractal Channel and your discretion come into play.
On the chart below the SMA extensions include small dots. If you remove those portions of the SMA lines then it should become clear what I'm talking about.
The SMA(16), SMA(32), SMA(64) and SMA(128) are very different. Their moving average periods differ by a lot. Without backshifting, these SMAs would rarely cross. But by backshifting 1/2 their period then they come into better alignment and Focal Points occur more frequently.
However, just as in real-life, everything comes with a trade-off. The trade-off with backshifting is that the SMA lines end prematurely and require extrapolation to extend to the end of the chart. Those extensions are not based on price data and are simply extrapolations from where the SMA had ended many bars ago. If market conditions have changed since the SMAs had ended then the SMAs will appear to have no relation to the current price bars. However, according to the theory, the TargetPrice may still be good. That's where the Fractal Channel and your discretion come into play.
On the chart below the SMA extensions include small dots. If you remove those portions of the SMA lines then it should become clear what I'm talking about.
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