Combining Adaptive Moving Averages in a Trend Histogram

Summary

The document describes a trend indicator that combines an adaptive moving average based on Kaufman’s KAMA with the original KAMA. The referenced method adjusts for where the closing price lies within the high–low range, and the combination is proposed as a way to reduce whipsaws compared with either average used alone.

This version displays the estimated trend state as a histogram in a separate window, with color changes offered as signals. The document provides no test results, parameter guidance, or rules for entering and exiting trades, so the claimed reduction in whipsaws is not demonstrated here. It presents the indicator as a possible system component rather than a fully specified or validated strategy.

Key ideas

• The indicator combines an adaptive moving average with Kaufman’s KAMA to estimate trend direction.
• The adaptive method accounts for the close’s location within the high–low range.
• The histogram displays the current trend estimate in a separate chart window.
• Color changes can be used as signals, but the document gives no complete trading rules or performance evidence.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.