TASC's January 2023 edition of Traders' Tips includes an article titled "True Range Adjusted Exponential Moving Average (TRadj EMA)" by Vitali Apirine. This code implements the indicator presented in that publication.
█ CONCEPTS
The True Range Adjusted Exponential Moving Average (TRAdj EMA) is a trend-following indicator that considers volatility for a quicker response to price changes. It is an EMA that modulates its weighting factor based on the true range (TR) of the asset. In a trading strategy, traders can use a TRAdj EMA in tandem with an EMA of the same length to identify an asset's trend, or they can use it alongside another TRAdj EMA of a different length to identify turning points and filter price movements.
█ CALCULATIONS
The following steps are performed to calculate the indicator:
• Calculate the asset's TR according to the standard definition proposed by J. Welles Wilder, Jr. • Define the true range adjustment factor as: TRAdj =(Current TR − Minimum TR) ⁄ (Maximum TR − Minimum TR), where Maximum TR and Minimum TR are the maximum and minimum TR values over the specified lookback period. • Calculate the TRAdj EMA in the same manner as a traditional EMA, but with a weighting factor defined as: 2*(1 + TRAdj*Multiplier) ⁄ (EMA length + 1), where Multiplier is an input parameter that ranges from 5 to 10. For comparison, a traditional EMA uses a weighting factor of 2 ⁄ (EMA length + 1).
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in publications is governed by House rules. يمكنك جعله مفضلاً لاستخدامه على الرسم البياني.
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