Corrected T3 Moving Average for Flattening Small Changes

Summary

This indicator combines a T3 moving average with an adaptive correction intended to flatten the output when changes are small relative to recent variability. The described calculation first forms T3 from a cascade of six exponential averages and a hotness parameter, then compares the squared dispersion of the price with the squared gap between the current T3 estimate and the prior corrected value. That comparison determines how much of the new T3 value is incorporated into the corrected line.

The author proposes using the flattened line to help identify ranging conditions or possible reversal areas, and the display distinguishes the T3 line from its corrected counterpart. The document provides implementation code and example settings, but no backtest, market-specific evaluation, or evidence that these zones reliably precede reversals. Its signals depend on the selected period, hotness, price input, and initialization behavior. The code also leaves some early-bar and state-handling details to the platform, so results may vary across implementations.

Key ideas

• The indicator smooths a T3 moving average further when changes are small relative to measured price variability.
• Its T3 component is built from six successive exponential averages and a hotness parameter.
• The corrected line is presented as a visual aid for spotting ranges and possible reversal zones.
• The document supplies code and example settings but no empirical validation of signal quality.
• Parameter choices and implementation details can affect the indicator's behavior.

Tags

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