Meet the Creator:
Perry Kaufman
Perry Kaufman’s adaptive moving average (AMA) is a game changer for traders looking to enhance their strategies. This tool provides signal points based on standard mean-square deviation, making it easier to spot market trends.
So, how do we interpret these signal points? When the market is in a sideways (or flat) phase, the AMA indicator remains horizontal, and you won't see any signal points. However, when a directional trend emerges that surpasses the mean-square deviation, a colored point will pop up. This point acts as a cue for you to consider entering or exiting the market.
The positioning of these signal points follows a specific formula:
AMA-AMA0 > StDev(AMA-AMA0, periodAMA) * dK
Here's a quick breakdown of the components:
- AMA-AMA0: The last expansion of the AMA;
- StDev(AMA - AMA0, periodAMA): The standard deviation of the indicator extensions for a specific period;
- dK: An external parameter that you can adjust.
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