Adaptive Moving Averages That Converge Faster During Trends
Summary
The document describes a pair of adaptive moving averages intended for use like slower conventional averages. The main average starts with a smoothing factor determined by a length setting. When price makes new rolling highs while above the average, or new rolling lows while below it, the smoothing factor increases, allowing the average to move closer to price as a trend persists. A price crossing the main average resets that factor.
A second, faster average is also calculated, with its update depending on whether price is above or below the main average; the display colors the area between the two according to their relative positions. The stated motivation is to produce more timely crosses as trends continue. The document supplies indicator logic and parameter descriptions, but no chart examples, backtests, asset or timeframe guidance, or evidence that the modified crosses improve trading results. It should therefore be treated as an indicator design proposal rather than a validated strategy.
Key ideas
- The main average begins with a smoothing factor based on the configured length.
- New rolling highs or lows in the direction of price movement increase the smoothing factor.
- A price cross of the main average resets its smoothing factor.
- A separate faster average is updated differently depending on price's position relative to the main average.
- The document offers no empirical validation of the indicator's trading value.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.