Kaufman Adaptive Moving Average Smoothing and Filtering

Summary

The document introduces Perry Kaufman’s Adaptive Moving Average (AMA), a moving average designed to reduce sensitivity to price noise while limiting lag in detecting trends. It describes AMA as an alternative to conventional moving averages, highlighting its adjustable user controls.

This version adds adjustable smoothing and a filter intended to suppress small changes in the AMA. The document offers no calculation details, parameter guidance, backtest results, or evidence about how the added filter performs. It is therefore a brief indicator description rather than a complete trading method; it does not specify entry or exit rules or establish that the indicator improves trading outcomes.

Key ideas

• Kaufman’s AMA aims to reduce the effect of price noise while retaining responsiveness to trends.
• It was presented as an alternative to ordinary moving averages with greater user control.
• This version provides adjustable smoothing and a filter for insignificant AMA changes.
• The document does not describe a trading strategy or provide performance evidence.

Tags

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