True Market Mean

True Market Mean (Optimized) - User Guide
📋 Overview
The True Market Mean (TMM) indicator is a sophisticated multi-timeframe market analysis tool that approximates the "true" market equilibrium price by combining perspectives from different market participants. It helps identify potential support/resistance levels and trend direction changes.

🎯 Concept
The TMM calculates a weighted average of four key market perspectives:

Realized Price - Long-term cost basis (350-period SMA)
Long-Term Holder Proxy - Very long-term perspective (1400-period EMA)
Short-Term Holder Proxy - Recent market activity (50-period WMA)
Momentum Proxy - Market sentiment and trend strength

⚙️ Input Parameters
Time Periods
Realized Price Period (350): Long-term cost basis calculation
Long-term Holder Period (1400): Very long-term market perspective
Short-term Holder Period (50): Recent price action
Momentum Period (200): Trend strength measurement

Weighting System
Base Weight Realized Price (0.35): Primary long-term anchor
Base Weight LTH (0.30): Long-term trend component
Base Weight STH (0.25): Short-term market activity
Base Weight Momentum (0.10): Trend strength influence

Features
Use Dynamic Weighting: Automatically adjusts weights based on market volatility
Show Information Table: Displays real-time data table
Show Alternative TMM: Shows secondary calculation method

📊 Interpretation
Primary Signals
Bullish Signal (Green Triangle ↑): Price crosses above TMM
Bearish Signal (Red Triangle ↓): Price crosses below TMM
Strong Signals: Solid colored triangles (strong conviction)
Weak Signals: Light colored triangles (weaker conviction)

Market States
Green Background: Price above TMM (bullish regime)
Red Background: Price below TMM (bearish regime)

Information Table
The table (top-right) shows:
Primary and Alternative TMM values
Current market status (BULLISH/BEARISH)
Price deviation from TMM (%)
TMM trend direction (RISING/FALLING)
Market volatility level (LOW/MEDIUM/HIGH)

🎨 Visual Elements
Lines
Orange Line: Primary TMM calculation
Purple Line: Alternative TMM calculation (if enabled)
Background
Light green: Bullish territory (price > TMM)
Light red: Bearish territory (price < TMM)

💡 Trading Applications
Trend Identification
Bullish Trend: Price consistently above rising TMM
Bearish Trend: Price consistently below falling TMM
Range-bound: Price oscillating around flat TMM

Support/Resistance
TMM often acts as dynamic support/resistance

Significant deviations from TMM may indicate overbought/oversold conditions

Entry/Exit Signals
Long Entry: Strong bullish signal with price above TMM
Short Entry: Strong bearish signal with price below TMM
Exit/Stop: Price crossing back below/above TMM

⚠️ Risk Management
Use TMM in conjunction with other indicators
Consider volatility levels when interpreting signals
Strong signals in high volatility may be more significant
Always use proper stop-losses

🔧 Customization Tips
For Day Trading
Reduce all periods (e.g., 50, 200, 20, 50)
Increase STH weight for more sensitivity

For Swing Trading
Use default periods
Balanced weights work well

For Long-term Investing
Increase LTH and Realized Price periods
Give more weight to long-term components

Volatility Adjustments
In high volatility markets, dynamic weighting automatically emphasizes momentum
In low volatility, long-term components dominate

📈 Performance Tips
Best Timeframes: 4H, Daily, Weekly for reliable signals
Asset Classes: Works well with stocks, crypto, forex
Market Conditions: Effective in both trending and ranging markets
Confirmation: Combine with volume analysis for stronger signals

🚀 Advanced Features
Dynamic Weighting
When enabled, the indicator automatically:
Increases momentum weight during high volatility
Emphasizes long-term components in stable markets
Adapts to changing market conditions

Alternative TMM
The purple line uses price deviation instead of momentum rate-of-change, providing:
Different sensitivity to market moves
Additional confirmation of primary signals
Alternative perspective on market equilibrium

❗❗❗ Limitations❗❗❗
Lagging indicator (based on moving averages)
Works best in conjunction with other tools
May give false signals during low-volume periods
Requires parameter optimization for different assets

🔄 Optimization
Experiment with:
Period lengths based on your trading style
Weight distributions for different market conditions
Enabling/disabling alternative TMM based on preference
Table display based on screen space