DMA Adaptive Moving Average Calculation and Inputs
Summary
The document defines a DMA indicator using an applied price and a period measured in days. It gives a default chart timeframe of M15 and a default period of 17. Its recurrence updates the current value as a weighted blend of the applied price and the previous DMA value, with the weight derived from a multi-step calculation involving price movement over the selected period.
The formula’s intermediate terms compare the net price change across the period with the sum of consecutive price changes, then transform that ratio into the smoothing coefficient. This makes the averaging weight responsive to price movement rather than fixed as in a simple moving average. The document supplies a formula and input descriptions, but no trading rules, signal interpretation, market examples, or performance evidence. It also does not discuss edge cases in the calculation or how the indicator behaves across assets and timeframes; these would need investigation before using it in a strategy.
Key ideas
- DMA updates its value through a weighted blend of applied price and the previous indicator value.
- The smoothing weight depends on price changes across the selected period.
- Users can set the period and the price series used in the calculation.
- The stated defaults are an M15 timeframe and a period of 17.
- No trading rules or performance evidence are supplied.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.