Gaussian Envelope Indicator

Gaussian Envelope Indicator

Gaussian Envelope is a powerful technical indicator based on kernel smoothing with a Gaussian kernel. The indicator builds a dynamic price channel that adapts to market conditions and provides clear entry signals when the channel boundaries are breached.

Unlike classic Bollinger Bands or Envelopes, Gaussian Envelope uses non-linear weighted smoothing, making it more sensitive to local price changes and less prone to lag.

✨ Key Features

• Adaptive Smoothing — uses Gaussian kernel for weighted price averaging

• Two Operating Modes — Repainting and Non-Repainting modes

• Visual Signals — ▲ and ▼ arrows when channel boundaries are breached

• Information Dashboard — displays all current parameters and signals in real time

• Customizable Colors — full visual customization

• High Performance — optimized for any timeframe

? How It Works

The indicator calculates a weighted moving average of prices using a Gaussian weighting function. Weights decrease exponentially as the distance from the current bar increases, providing smooth smoothing without losing sensitivity to local changes.

Calculation Formula:

• Center line — weighted average with Gaussian kernel

• Upper/Lower boundaries = center line ± MAE × Multiplier

• MAE (Mean Absolute Error) — average absolute deviation

? Input Parameters

? Trading Signals

SELL Signal (▼)

Condition: Price closes breaking the upper boundary from top to bottom
Interpretation: Bearish impulse, possible start of downward movement
Recommendation: Consider short positions

BUY Signal (▲)

Condition: Price closes breaking the lower boundary from bottom to top
Interpretation: Bullish impulse, possible start of upward movement
Recommendation: Consider long positions

Neutral Zone

Condition: Price inside the channel
Interpretation: Consolidation, no clear signal
Recommendation: Wait for a signal or use other indicators

? Information Dashboard

The dashboard displays in real time:

• Bandwidth — current bandwidth value

• Multiplier — current multiplier value

• Mode — operating mode (Repainting / Non-Repainting)

• Smoothed — current smoothed line value

• Signal — current signal (BUY/SELL/NEUTRAL)

• Last Signal — time of the last signal

• Upper/Lower — current boundary values

? Operating Modes

Repainting Mode

• Indicator displays only on the last 500 bars

• Lines and signals may change as new data arrives

• Advantage: Maximum accuracy on the current bar

• Disadvantage: Historical signals may change

Non-Repainting Mode

• Indicator calculates for all bars

• Historical values are fixed and do not change

• Advantage: Reliable backtesting data

• Disadvantage: Slight lag behind price

? Usage Recommendations

Optimal Settings

• Bandwidth: 8-12 for daily charts, 4-8 for hourly charts

• Multiplier: 2-4 depending on volatility

• Mode: Non-Repainting for backtesting, Repainting for live trading

Combinations with Other Indicators

• Trend Confirmation: Use with Moving Average or MACD

• Signal Filtering: Add RSI or Stochastic

• Volume: Cross-check signals with volume indicators

Timeframes

• Scalping: M1-M5 (requires parameter optimization)

• Short-term Trading: M15-H1

• Swing Trading: H4-D1 (recommended default settings)

⚠️ Limitations and Risks

• The indicator does not guarantee 100% signal accuracy

• During low volatility periods, many false signals may occur

• Repainting mode is not suitable for backtesting

• Requires at least 500 bars of history to work

? Technical Requirements

• Platform: MetaTrader 5

• Minimum terminal version: build 2000+

• Required history: at least 500 bars

• Instrument types: any (forex, CFD, futures, stocks, cryptocurrencies)