The Avramis River Indicator

The Avramis River is a visual identification tool designed to offer information regarding market sentiment and the clarity of the price trend. It is based on various moving averages and volatility combinations.

Primary Function and Uses

  • It functions primarily as a trend following device.
  • It helps scan markets to spot trending opportunities or warn of ranging conditions.
  • It provides context to price action.
  • It reflects support and resistance zones usable for trend following.
  • It should be used in combination with other technical tools for trade execution purposes.

Components of the Avramis River

The indicator consists of three different parameters but is interpreted as one single indicator:

  • The Blue River (The Anchor): This is the anchor of the trend following indicator and is used to determine the main trend.
  • The Brown River (The Volatility Filter): This surrounds the Blue River and acts as an extra filter, warning of increased volatility.
  • The Gold River (The Delayed River): This is used for confirmation regarding a change in trend and assists in better understanding the clarity of the trend.

Interpreting the River: Key Concepts

When comparing price action to the Avramis River, the following technical concepts are used, similar to standard moving averages:

  • Comparing price action relative to the rivers.
  • Crossover of rivers.
  • Slope of rivers.
  • Distance between rivers.
  • Possible support and resistance levels.

Identifying Market Conditions

Trend Strength and Direction

  • Strong Uptrend:
    • Prices are expected to be above the Blue River.
    • The Blue River is expected to be above the Gold River.
    • The rivers are expected to be strongly upward sloping.
  • Strong Downtrend:
    • Price is expected to be below the Blue River.
    • The Blue River is expected to be below the Gold River.
    • The rivers are expected to be strongly downward sloping.
  • Weak Trend:
    • The rivers are seen mixing between each other.
    • Price does not remain completely below (or above) the Blue River.

Sideways or Ranging Market

The river indicator warns of a sideways market when:

  • Prices are crossing above and below the rivers frequently.
  • The Blue and Gold Rivers are overlapping.
  • The rivers are flat sloping.

Identifying Trend Reversal and Acceleration

Signs of Trend Weakening

The first sign that an existing trend is weakening is when price starts trading inside the river following a trending phase.

Trend Reversal Indications (General)

  1. A successful close above (after a downtrend) or below (after an uptrend) the Blue River is the first indication of a possible reversal. This signal is more reliable if accompanied by reversal patterns in price.
  2. Further confirmation is given after the Blue River crosses the Gold River (above for bullish reversal, below for bearish reversal).

Confirmation: The White River

As the new trend accelerates, the Blue River moves away from the Gold River, creating a gap between them known as the White River. The appearance of the White River acts as:

  • A signal of strength.
  • A confirmation of the new trend.

Note on Entry: Although the White River signals a strong trend start, it may also precede the first corrective wave. Traders may wait for this corrective wave to end, often retracing towards the Blue River area, before entering.

Support and Resistance Zones

The Avramis Rivers function as possible support and resistance zones, similar to moving averages:

  • Uptrend Support: In a strong uptrend, corrections often find support inside the Blue River, outlined by its upper and lower boundaries.
  • Downtrend Resistance: In a strong downtrend, corrections often find resistance inside the Blue River, outlined by its upper and lower boundaries.

Conclusion on Usage

The most important function of the Avramis River is as a visual tool to help traders quickly scan markets and understand the clarity of the trend. It is critical to combine this tool with other technical analysis methods for trade execution.

Detailed Summary

The Avramis River Indicator is a visual trend following tool, built on moving averages and volatility combinations, designed to identify market sentiment, trend clarity, and ranging conditions. It consists of three components—the Blue River (Anchor), the Brown River (Volatility Filter), and the Gold River (Delayed Confirmation)—which are interpreted together based on their slope, crossovers, and relation to price action. It helps identify strong trends (where price is outside and rivers are sloping strongly) and sideways markets (where rivers overlap and are flat). The indicator also provides early warnings of trend weakening (price entering the river) and confirmation of reversal (Blue River crossing the Gold River). When a new trend accelerates, a gap called the White River forms, signaling strength. Importantly, the rivers act as dynamic support and resistance zones, and the tool must be combined with other technical methods for effective trade execution.

Key Takeaways

  • The Avramis River Indicator is a visual trend following tool based on moving averages and volatility.
  • Its primary uses are scanning markets for trends, warning of ranging conditions, and providing context for price action.
  • The indicator comprises three distinct parameters: the Blue River (main trend anchor), the Brown River (volatility filter), and the Gold River (trend change confirmation).
  • Interpretation relies on comparing price relative to the rivers, analyzing river crossovers, slope, distance, and potential support/resistance zones.
  • A Strong Uptrend is characterized by prices above the Blue River, which is above the Gold River, with rivers strongly upward sloping.
  • A Sideways Market is indicated by frequent price crossings of the rivers, overlapping Blue and Gold Rivers, and flat slopes.
  • Trend weakening occurs when price starts trading inside the river.
  • Trend reversal is first signaled by a successful price close beyond the Blue River, and confirmed when the Blue River crosses the Gold River.
  • The White River (the gap between the Blue and Gold Rivers) confirms the acceleration and strength of a new trend.
  • The Avramis Rivers function as dynamic support and resistance zones, often guiding corrective waves back toward the Blue River.
  • The tool is primarily for visual analysis and must be combined with other technical tools for trade execution.