Kaufman Adaptive Moving Average (KAMA) Strategy [TradeDots]"The Kaufman Adaptive Moving Average (KAMA) Strategy" is a trend-following system that leverages the adaptive qualities of the Kaufman Adaptive Moving Average (KAMA). This strategy is distinguished by its ability to adjust dynamically to market volatility, enhancing trading accuracy by minimizing the effects of false and delayed signals often associated with the Simple Moving Average (SMA).
HOW IT WORKS
This strategy is centered around use of the Kaufman Adaptive Moving Average (KAMA) indicator, which refines the principles of the Exponential Moving Average (EMA) with a superior smoothing technique.
KAMA distinguishes itself by its responsiveness to changes in market prices through an "Efficiency Ratio (ER)." This ratio is computed by dividing the recent absolute net price change by the cumulative sum of the absolute price changes over a specified period. The resulting ER value ranges between 0 and 1, where 0 indicates high market noise and 1 reflects stronger market momentum.
Using ER, we could get the smoothing constant (SC) for the moving average derived using the following formula:
fastest = 2/(fastma_length + 1)
slowest = 2/(slowma_length + 1)
SC = math.pow((ER * (fastest-slowest) + slowest), 2)
The KAMA line is then calculated by applying the SC to the difference between the current price and the previous KAMA.
APPLICATION
For entering long positions, this strategy initializes when there is a sequence of 10 consecutive rising KAMA lines. Conversely, a sequence of 10 consecutive falling KAMA lines triggers sell orders for long positions. The same logic applies inversely for short positions.
DEFAULT SETUP
Commission: 0.01%
Initial Capital: $10,000
Equity per Trade: 80%
Users are advised to adjust and personalize this trading strategy to better match their individual trading preferences and style.
RISK DISCLAIMER
Trading entails substantial risk, and most day traders incur losses. All content, tools, scripts, articles, and education provided by TradeDots serve purely informational and educational purposes. Past performances are not definitive predictors of future results.
Kaufmans
twisted SMA strategy [4h] Hello
I would like to introduce a very simple strategy that uses a combination of 3 simple moving averages ( SMA 4 , SMA 9 , SMA 18 )
this is a classic combination showing the most probable trend directions
Crosses were marked on the basis of the color of the candles (bulish cross - blue / bearish cross - maroon)
ma 100 was used to determine the main trend, which is one of the most popular 4-hour candles
We define main trend while price crosses SMA100 ( for bullish trend I use green candle color )
The long position strategy was created in combination of 3 moving averages with Kaufman's adaptive moving average by alexgrover
The strategy is very accurate and is easy to use indicators
the strategy uses only Buy (Long) signals in a combination of crossovers of the SMA 4, SMA 9, SMA 18 and the Kaufman Adaptive Moving Average.
As a signal to close a long position, only the opposite signal of the intersection of 3 different moving averages is used
the current strategy is recommended for higher time zones (4h +) due to the strength of the closing candles, which translates into signal strength
works fascinatingly well for long-term bullish market assets (for example 4h Apple, Tesla charts)
Enjoy and trade safe ;)
