The Adaptive Moving Average (AMA) technical indicator is used to plot a moving average with low sensitivity to noise in price series and is characterized by a minimum delay for determining the trend. It was developed and described by Perry Kaufman in his book “Smarter Trading”.
One of the disadvantages of various price series smoothing algorithms is that random price spikes can lead to false trend signals. On the other hand, smoothing leads to an inevitable delay in the trend stop or reversal signal. This indicator was developed to overcome these two shortcomings.
The indicator view in the chart.
The indicator has the following parameters:
Period - setting of the indicator calculation period.
Fast Smoothing Constant - the smoothing coefficient for a small period.
Slow Smoothing Constant - the smoothing coefficient for a large period.
Source - setting of the indicator calculation parameters:
Panel/Moving average period - selection of the indicator location in the chart:
- New panel
Show value - display of the indicator value on the price scale on the left.
Scale/Auto-scaling - if this option is on, the scale will be automatically calculated, based on the minimum and maximum indicator values, so that the indicator would fit in the chart.
Color - color setting of the indicator.
Visual type - visual setting of the indicator display in the chart:
- Up arrow
- Down arrow
- Axis label
Line style - setting of the line display style:
- Dash - dot
- Dash - dot - dot
Width - setting of the indicator line width.
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