Double-Smoothing Adaptive Moving Averages to Reduce Whipsaws

Summary

This note describes a double-smoothed adaptive moving average intended to address frequent slope changes in an adaptive moving average. It places the method in the context of Kaufman's adaptive moving average and a modification that also accounts for where the close falls within the high–low range. The suggested system combines the adaptive average with KAMA, with the aim of reducing whipsaws compared with using either average alone.

The note proposes treating changes in the indicator's color as trading signals. It offers no formulas, parameter settings, market examples, or backtest results, so the strength of the claimed reduction in false signals cannot be assessed from this description. As with other moving-average signals, color changes may lag price moves or behave differently across instruments and market conditions; the note does not discuss those limits or specify entry, exit, or risk rules.

Key ideas

• The method double-smooths an adaptive moving average to moderate frequent slope changes.
• The described adaptive average incorporates the close's location within the high–low range.
• Combining the adaptive average with KAMA is proposed as a way to reduce whipsaws.
• Indicator color changes are suggested as trading signals.
• The note provides no parameters or empirical evidence for evaluating the approach.

Tags

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