Generalized Double DEMA for Smoothing with Reduced Lag

Summary

The document introduces the double exponential moving average, or DEMA, as a way to reduce the lag associated with traditional moving averages. It describes calculating an exponential moving average, smoothing that result with a second EMA of the same period, and combining the two to form DEMA. The indicator is presented as a general-purpose average that can also be interpreted through changes in its plotted color.

The generalized version applies the GDEMA operation to another GDEMA, following the intermediate calculation used in Tim Tillson's T3 approach. The author characterizes its output as smoother than Generalized DEMA but less smooth than T3, with quicker response than T3. Users are advised to experiment with settings and use cases to find a suitable balance of smoothness and responsiveness. The document offers no formula parameters, market examples, or empirical comparisons, so the qualitative claims do not establish trading performance.

Key ideas

• DEMA combines an EMA with a second EMA applied to the first to reduce moving-average lag.
• The generalized double version applies GDEMA twice, using a step associated with the T3 calculation.
• The author describes the result as smoother than GDEMA and faster, but less smooth, than T3.
• The indicator can be used as an average or through its color changes, but no performance tests are supplied.

Tags

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