Adaptive Moving Average – Double Smoothed

In “Adaptive Moving Averages” in this issue, author Vitali Apirine introduces an adaptive moving average (AMA) technique based on Perry Kaufman’s KAMA (Kaufman adaptive moving average). His update to the original KAMA allows the new method to account for the location of the close relative to the high–low range. The author describes a trading system that combines the AMA and KAMA, suggesting that the combination may reduce the number of whipsaws relative to using either moving average by itself.

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Know about this indicator

An adaptive moving average (AMA) is a type of price-free MT5 indicator that uses two smoothed periods to calculate the current price. The first period is used to detect recent trends, and the second period is used to smooth out volatility. This helps you make better trading decisions by taking into account both long-term trends and short-term fluctuations.

This version is addressing one of the possible issues of AMA: being too nervous (changing the slope in some cases frequently). Double smoothing is eliminating some of those signals and making the AMA itself a bit “faster” too

Usage :

You can use color changes as signals

You can use an AMA in the MT5 chart as part of your trend analysis strategy to help predict when a trend is over or starting again.

By using an adaptive MA with a double smoothing algorithm, you can create filters that are more accurate and granular than traditional Moving Averages.

To apply an AMA, open the Indicators window and select Price & Volume > Adaptive Moving Average (EMA).

In the EMA Type dropdown menu, choose Double Smoothed. Select From Bars, specify First Period (in minutes) as 20 minutes, Second Period (in minutes) as 40 minutes, and Default Weighting. Click OK. To use this filter in your chart’s plot panel or dashboard gridlines, drag it onto the plot area or gridlines toolbar.