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Conventional Measurement-While-Drilling (MWD) technology is unable to function statically at the predicted temperatures of deep formations exceeding 200 °C in wells reaching depths of 10,000 m. It is limited to measuring downhole engineering parameters through purely mechanical means, such as inclination. However, the accurate long-distance transmission of drilling fluid pulse signals poses a significant bottleneck, restricting the application of these mechanical measurement methods. To address these issues, this paper develops and designs an algorithm to identify and analyze the amplitude characteristics of deep well mud signals. By employing a signal coding algorithm, a signal processing analysis method, and a signal feature recognition algorithm based on grey correlation degree, we construct a signal recognition method capable of decoding mud amplitude encoded signals. Key techniques such as filtering, smoothing, and feature extraction are utilized in the signal processing, and the proposed method's effectiveness is verified through the analysis of collected signals. Furthermore, long-distance simulation analysis software is developed to evaluate waveform distortion during extended transmission, confirming the feasibility of the recognition algorithm. Laboratory experiments demonstrate that this algorithm can accurately recognize and demodulate signals generated by mechanical inclinometer structures, providing a novel decoding method for signal transmission in deep and ultra-deep wells. [ABSTRACT FROM AUTHOR]