Using a Double-Smoothed EMA for Trend Change Signals

Summary

This document describes a smoothed version of a trend direction and force indicator. It says the indicator originated with Pyotr Wojdyło for the MetaStock platform and was later adapted for MetaTrader 4 and MetaTrader 5. In this version, a double-smoothed exponential moving average is used to smooth the result, with the stated aim of reducing false signals.

The suggested use is to treat changes in the indicator’s color as possible trend-change or breakout signals. The document does not explain the indicator’s calculation, define its parameters, or provide backtest results or comparative evidence that smoothing improves signal quality. It gives a basic interpretation, so traders would need further specification and testing before relying on it in a strategy.

Key ideas

• The indicator applies double-smoothed exponential moving average smoothing to its output.
• Color changes are proposed as signals of trend changes or breakouts.
• The document describes the smoothing as a way to reduce false signals but provides no performance evidence.
• The calculation and parameter settings are not specified.

Tags

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