Corrected Generalized Double DEMA for Trend Signals

Summary

The document explains the double exponential moving average (DEMA), which combines an exponential moving average with a second smoothing pass to reduce lag relative to a conventional moving average. Generalized DEMA adjusts the weights in that combination to alter the indicator’s responsiveness. Applying generalized DEMA to itself produces generalized double DEMA, described as smoother than generalized DEMA but less smooth than the T3 indicator.

This variant applies a correction method attributed to Alexander Uhl and adds floating levels intended to help identify trend conditions. It offers several ways to interpret color changes as signals: changes in slope, crossings of outer or middle floating levels, or crossings of the average value. The description gives no parameter guidance, market examples, comparative testing, or evidence that one signal mode performs better. These features make it an indicator construction and interpretation note, rather than a fully specified trading strategy; signal quality and lag trade-offs remain dependent on settings and market data.

Key ideas

• DEMA combines an EMA with a second EMA smoothing pass to reduce lag compared with traditional moving averages.
• Generalized DEMA uses adjustable weighting factors to change the indicator’s speed.
• Applying generalized DEMA twice yields a smoother result than GDEMA but a less smooth one than T3.
• The corrected variant adds a correction method, floating levels, and several color-change signal modes.
• The document provides no parameter advice or performance evidence for the signal choices.

Tags

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