The T3 Moving Average: Construction and Trading Uses

Summary

The document explains the T3 moving average, attributed to Tim Tillson, as a smoother intended to reduce lag while filtering price noise. Its calculation cascades six exponential moving averages, then combines the final stages using coefficients derived from a volume factor. It identifies period length and volume factor as the main inputs, describing the trade-off between a smoother line and a more responsive one.

Suggested uses include identifying trend direction, interpreting price crossings, and treating the line as a possible support or resistance reference. The text gives default parameter values but provides no backtest, comparative results, or rules for confirming signals and managing risk. These uses should therefore be understood as indicator applications rather than evidence of predictive advantage; behavior may vary with market and timeframe.

Key ideas

• T3 combines a cascade of six exponential moving averages.
• A volume factor controls the balance between smoothness and responsiveness.
• The line can be used to assess trend direction or observe price crossings.
• The document supplies no performance evidence or complete trading and risk rules.

Tags

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