Volatility-Adaptive Moving Average with a Resetting Lookback

Summary

VolatilityMA is a moving average intended to help identify trade direction. It calculates an average of a chosen price series while adapting the averaging length to changes in normalized price variability. The description says the lookback resets to its minimum when a volatility barrier is exceeded; otherwise, it grows from its prior length. Users can adjust the calculation period, barrier, and applied price.

The document sketches calculations based on price changes, their moving average, and a standard deviation measure. It provides no chart examples, performance tests, or rules for converting the indicator into entries and exits. Its formula description is incomplete or ambiguous in places, including the variance expression, so an implementation should be verified before use. The indicator’s usefulness and behavior will depend on parameter choices, price input, and market conditions.

Key ideas

• The indicator averages a selectable price series and is presented as a tool for detecting trade direction.
• Its averaging length resets when a volatility measure exceeds a configured barrier and otherwise increases over time.
• The adjustable inputs are the calculation period, reset barrier, and applied price.
• The formula description does not establish trading performance and contains an unclear variance expression that needs verification.

Tags

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