Reducing Moving Average Lag with the Third Generation Method

Summary

The document introduces a third generation moving average method attributed to Manfred G. Dürschner. It describes the method as reducing temporal lag through a procedure that increases the moving average period. The indicator is intended to be used like a conventional moving average, primarily to assess the current direction of a market trend.

The description claims that the method has less lag than a simple exponential moving average and reacts more quickly to price changes, but it provides no calculations, comparative chart data, or backtest results to support that comparison. It also acknowledges that the indicator still lags and may produce false signals. The text mentions a required software library for implementation, but gives no parameter guidance or trading rules. As presented, this is a brief overview of an indicator concept rather than evidence that it improves trading decisions.

Key ideas

• The method aims to reduce moving average lag by increasing the averaging period.
• The indicator is intended to help identify trend direction.
• The document claims lower lag and faster response than a simple exponential moving average.
• Lag remains, and the indicator can produce false signals.
• No performance evidence or detailed trading rules are provided.

Tags

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