Adaptive Moving Average – Generalized 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.
This version of the indicator is coded in a changed way.
Know about this indicator
The original uses fixed high and low prices for one part of calculation. While that is (partly) OK if you are using it as a moving average of price, it limits its usage greatly. For start, it can not be used on data other than prices (the results would be highly misleading at the least). So this version corrects that and is using strictly the chosen value (price) for all the calculations without hidden data dependencies
Usage :
It can be used as any regular moving average (or, for the users of KAMA – Perry Kaufman’s AMA, as a “faster” substitute of KAMA). Also, this version instead adds floating levels and, implicitly, makes it a sort of a “twice adaptive” indicator (since the levels are adapting to the market changes). To reflect the additions, now you have a choice when to change colors of the indicator :
- change when the slope of AMA changes
- change when the AMA crosses outer floating levels (default)
- change when the AMA crosses the middle (dynamic “zero”) level
Adaptive Moving Average – generalized version with floating levels
An adaptive moving average is a technical free mt5 indicator that helps traders predict future movements in price. It uses historical data to create a series of averages, which can then be used to calculate the current trend and make trading decisions.
The main difference between an adaptive moving average (AMA) and other Moving Averages is that an AMA incorporates floating levels. This means that the level of the moving average will change automatically as new data becomes available.
This allows it to track more volatile prices better than traditional Moving analyses, while still providing consistent accuracy over time.
How does Adaptive Moving Average with Floating Levels work in MT5 Chart?
The basic idea behind Adaptive MA with FLOATING LEVELS MT5 India is simple. We keep adding indicators (lines) until there are no longer any divergences between them or until they all cross above/below each other – whichever comes first (see figure below).
When this happens, we say that ALL LINES have “crossed.” The process repeats itself indefinitely, perpetually refining our forecast for prices by averaging out past signals along the way.
As you can see in Figure 1, each line has two properties: its color and its weighting percentage relative to all others; both represent aspects of how strongly this particular line reflects recent trends.