To reiterate so far, the indicator:
- is designed to show when prices are moving sideways or moving in a sideways channel by containing prices between a support and a resistance zone
- prices have been modelled as a sine wave to represent this sideways price action
- the upper and lower boundaries of each zone are based upon the application of a control chart directly to prices
- Monte Carlo techniques and statistical tests have been employed to optimise the boundaries of each zone such that approximately 95% of the time the peaks and troughs of the sine wave should occur within their respective zone boundaries
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