Adaptive Moving Average – AMA – with filter, histogram version

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.

Know about this indicator

An adaptive moving average with a filter, histogram version (AMA-W) free MT5 indicator is used to identify trends in price activity. The basic idea behind this Buy Sell indicator MT5 is that it uses a moving average of prices to smooth out short-term fluctuations and give you a better understanding of longer-term trend conditions.

This way, you can make more informed trading decisions by knowing what’s happening over the long term.

The indicator is coded exactly as it is described by Vitali Apirine (including the usage of high and low prices for adapting). But in order to make it easier to use it in a “classical way” (ie: using some sorts of signals that we can get from it), this version has additional filter to make the slope change color changes less frequent and thus to make false signals appear in fewer occasions. That is then coded into a histogram version of the indicator that shows the state of the estimated trend.

Usage :

You can use the color change of this indicator as signal.

The main advantage of using an AMA-W indicator is that it allows for smoother execution when dealing with volatile markets.

It also provides information about asset class performance and helps you spot potential market traps or bubbles before they become too big to ignore.

To use the AMA-W indicator, open MetaTrader 5 and click on Indicators > Moving Averages & Filters > Adaptive Moving Average With Filter Histogram Version (AMA – W). Then select your preferred time period (1 day, 1 week, 2 weeks…) and enter your desired parameters: MA(14), SMA(14), EMA(26), Weighting (%). Finally, click on OK to create the MT5 chart setup.