Recursive Moving Average and Trend Oscillator Signals

Summary

This document describes a recursive moving average attributed to Dennis Meyers and outlines a trend oscillator formed by comparing that average with an exponential moving average of the same period. The proposed signal comes from watching for changes in the difference that exceed ordinary price noise, which may indicate the start of a bullish or bearish trend. The accompanying indicator calculates the recursive average from progressively shorter sums of recent closing prices, then applies a smoothing average.

The text says the method aims to forecast the next price using a relatively small history and points to Meyers’s 1998 article as its origin. It provides no test results, parameter evaluation, benchmark, or risk controls, so the potential trend signal is presented as an idea rather than validated evidence. The reproduced code is platform-specific, and the document does not explain how to set thresholds for distinguishing meaningful changes from noise.

Key ideas

• The recursive average combines sums of closing prices over progressively shorter lookbacks.
• A smoothed version of the recursive average can be used as an indicator line.
• The proposed trend oscillator compares the recursive average with an exponential moving average using the same period.
• Changes in the oscillator that exceed typical noise are treated as possible early trend signals.
• The document supplies no empirical validation or rules for setting a noise threshold.

Tags

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