Using Three Moving Averages to Color Trend Direction
Summary
This indicator compares fast, normal, and slow moving averages to give a visual reading of trend alignment. It colors the chart green when the fast average is above the normal average and the normal average is above the slow one, red when the ordering is reversed, and yellow when neither condition holds. Users can choose the average type and periods, and display the three average lines on or below the price chart.
The document presents the indicator’s rules and code, but gives no market examples, backtest, or evidence that its signals are profitable. The color shows relative ordering at a point in time; it does not establish trend strength, predict reversals, or define entries, exits, or risk controls. A yellow state simply means the averages are not strictly aligned in either direction, so it can include transitions and mixed conditions. The document also includes unrelated site privacy text, which does not contribute to the trading method.
Key ideas
- The indicator classifies direction using the ordering of fast, normal, and slow moving averages.
- Green marks strictly ascending average alignment, while red marks the reverse alignment.
- Yellow appears whenever neither full ordering condition is satisfied.
- Users can select average parameters and optionally show the average lines.
- No performance testing or 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.