Moving Average Converging
July 25, 2022
This indicator returns a moving average converging toward the price the more a trend makes new higher-highs or lower-lows depending on the detected trend.
This indicator returns a moving average converging toward the price the more a trend makes new higher-highs or lower-lows depending on the detected trend.
Settings
- Length: Controls the initial moving average smoothing factor (2 / (Length + 1)), as well as the period of rolling maximums/minimums.
- Increment: Smoothing factor increment (2 / (Increment+ 1)) for new higher-high/lower-low, lower values would return a faster converging moving average.
- Fast: Fast moving average smoothing factor.
Usage
The proposed moving average can be used like most slow moving averages.
Having a moving average able to converge closer to the price the longer a trend lasts allows users to obtain more timely crosses. This practice can remind us of the Parabolic SAR or our TRAMA indicator.
Notice on the chart above how the moving average converges at an increasing rate with the occurrence of new high-highs/lower-lows.
