A Weighted Moving Average Extension with Swing-Based Support and Resistance
Summary
The document proposes a custom moving average intended to move less quickly than the Hull moving average while lagging less than exponential or weighted averages. Its formula doubles the period weighted average of closing prices and subtracts the simple average for the same period. The author then smooths that line with a weighted average and uses crossovers to update support and resistance levels.
When the custom line crosses above its smoothed version, support is reset to the period low; a downward cross resets resistance to the period high. The displayed levels are then constrained against the current low and high, respectively. The document provides a formula and indicator logic but no parameter guidance, chart examples, backtest, or evidence that the indicator achieves its stated responsiveness goals. It is an indicator proposal rather than a tested trading system, and the material does not specify a market or timeframe.
Key ideas
- The proposed line doubles a period weighted average of closes and subtracts the simple average.
- A weighted average of the custom line serves as its smoothed comparison.
- An upward crossover resets support to the lowest low over the period.
- A downward crossover resets resistance to the highest high over the period.
- The document provides no empirical validation or guidance on choosing a period.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.