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X_STUDY®

Adaptive Moving Average (AMA)

Description

This indicator is either quick, or slow, to signal a market entry depending on the efficiency of the move in the market.

Formula

AMA = AMA(1) + α * (Close - AMA(1))

Where:

  • α = [(VI * (FC - SC)) + SC] ²
  • VI = Users defined measure of volatility or trend strength.
  • SC = 2 / (SN + 1)
  • FC = 2 / (FN + 1)
  • FN = Slow moving average < SN
Example