Compound Ratio Moving Average for Lower-Lag Price Tracking
Summary
The document describes CoRa_Wave, a moving average that assigns weights through a compound-ratio progression. The weights rise from older observations to newer ones with a consistent step ratio, unlike the linear sequence used by a conventional weighted moving average. The stated rationale is to reduce the influence of the older tail and give recent prices more weight, with the aim of tracking price swings with less lag.
The indicator includes a multiplier that adjusts the emphasis on recent data, automatic smoothing based on the window length, or a manually chosen smoothing setting. A zero multiplier is described as producing a simple moving average. The code also allows the source price and chart resolution to be selected; its defaults are the chart’s resolution and HLC3. The document provides an implementation but no comparative tests or performance evidence, so its claims about lag and tracking should be treated as design rationale rather than validated results.
Key ideas
- CoRa_Wave uses a compound-ratio progression to assign increasing weights to newer observations.
- The method is intended to reduce older observations’ contribution and limit moving-average lag.
- A multiplier controls how aggressively the weights favor recent prices, while zero yields a simple moving average.
- Smoothing can be automatic or manually set, and the source price and resolution are configurable.
- The document offers no empirical comparison to establish the claimed tracking benefits.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.