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Powered Kaufman Adaptive Moving Average
Introduction
The ability the Kaufman adaptive moving average (KAMA) has to be flat during ranging markets and close to the price during trending markets is what make this moving average one of the most useful in technical analysis. KAMA is calculated by using exponential averaging using the efficiency ratio (ER) as smoothing variable where 1 > ER > 0. An increasing efficiency ratio indicate a trending market. Based on one of my latest indicator (see Kaufman Adaptive Bands) i propose this modified KAMA that allow to emphasis the abilities of KAMA by powering the efficiency ratio. I also added a new option that allow for even more adaptivity.
The Indicator
The indicator is a simple KAMA of period length that use a powered ER with exponent factor.
When factor = 1 the indicator is a simple KAMA, however when factor > 1 there can be more emphasis on the flattening effect of KAMA.
You can also restrain this effect by using 1 > factor > 0
Note that when the exponent is lower than 1 and greater than 0 you are basically applying a nth square root to the value, for example pow(2,0.5) = sqrt(2) because 1/0.5 = 2, in our case :
pow(ER,factor > 1) < ER and pow(ER,1 > factor > 0) > ER
Self Powered P-KAMA
When the self powered option is checked you are basically powering ER with the reciprocal of ER as exponent, however factor does no longer change anything. This can give interesting results since the exponent depend on the market trend strength.
In orange the self powered KAMA of period length = 50 and in blue a basic powered KAMA with a factor of 3 and a period of length = 50.
Conclusion
Applying basic math to indicators is always fun and easy to do, if you have adaptive moving averages using exponential averaging try powering your smoothing variable in order to see interesting results. I hope you like this indicator. Thanks for reading !
The ability the Kaufman adaptive moving average (KAMA) has to be flat during ranging markets and close to the price during trending markets is what make this moving average one of the most useful in technical analysis. KAMA is calculated by using exponential averaging using the efficiency ratio (ER) as smoothing variable where 1 > ER > 0. An increasing efficiency ratio indicate a trending market. Based on one of my latest indicator (see Kaufman Adaptive Bands) i propose this modified KAMA that allow to emphasis the abilities of KAMA by powering the efficiency ratio. I also added a new option that allow for even more adaptivity.
The Indicator
The indicator is a simple KAMA of period length that use a powered ER with exponent factor.
When factor = 1 the indicator is a simple KAMA, however when factor > 1 there can be more emphasis on the flattening effect of KAMA.
You can also restrain this effect by using 1 > factor > 0
Note that when the exponent is lower than 1 and greater than 0 you are basically applying a nth square root to the value, for example pow(2,0.5) = sqrt(2) because 1/0.5 = 2, in our case :
pow(ER,factor > 1) < ER and pow(ER,1 > factor > 0) > ER
Self Powered P-KAMA
When the self powered option is checked you are basically powering ER with the reciprocal of ER as exponent, however factor does no longer change anything. This can give interesting results since the exponent depend on the market trend strength.
In orange the self powered KAMA of period length = 50 and in blue a basic powered KAMA with a factor of 3 and a period of length = 50.
Conclusion
Applying basic math to indicators is always fun and easy to do, if you have adaptive moving averages using exponential averaging try powering your smoothing variable in order to see interesting results. I hope you like this indicator. Thanks for reading !
Skrip sumber terbuka
Dalam semangat sebenar TradingView, pencipta skrip ini telah menjadikannya sumber terbuka supaya pedagang dapat menilai dan mengesahkan kefungsiannya. Terima kasih kepada penulis! Walaupun anda boleh menggunakannya secara percuma, ingat bahawa menerbitkan semula kod ini adalah tertakluk kepada Peraturan Dalaman kami.
Check out the indicators we are making at luxalgo: tradingview.com/u/LuxAlgo/
"My heart is so loud that I can't hear the fireworks"
"My heart is so loud that I can't hear the fireworks"
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.
Skrip sumber terbuka
Dalam semangat sebenar TradingView, pencipta skrip ini telah menjadikannya sumber terbuka supaya pedagang dapat menilai dan mengesahkan kefungsiannya. Terima kasih kepada penulis! Walaupun anda boleh menggunakannya secara percuma, ingat bahawa menerbitkan semula kod ini adalah tertakluk kepada Peraturan Dalaman kami.
Check out the indicators we are making at luxalgo: tradingview.com/u/LuxAlgo/
"My heart is so loud that I can't hear the fireworks"
"My heart is so loud that I can't hear the fireworks"
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.