Kaufman's Adaptive Moving Average is an intelligent moving average tool developed on the EMA (Exponential Moving Average), which is responsive to trend volatility. It follows the prices when the price fluctuations are insignificant, and the noise is low. When market volatility is low, Kaufman’s Adaptive Moving Average remains near the current market price, but when volatility increases, it will lag behind. What the KAMA indicator aims to do is filter out “market noise” – insignificant, temporary surges in price action. One of the primary weaknesses of traditional moving averages is that when used for trading signals, they tend to generate many false signals. The KAMA indicator seeks to lessen this tendency – generate fewer false signals – by not responding to short-term, insignificant price movements.
View of indicator on chart:
To add and customize this indicator, you need to open the Indicator Settings Window.
Kaufman Moving Average
Show zero values - display zero values.
Scale - if this option is enabled, the scale will be automatically calculated based on the minimum and maximum value of the indicator, so that the indicator would fit on the chart.
Visual type - visual setting of the indicator display on the graph:
- Up arrow
- Down arrow
- Axis label
Line style - setting up the type of line display:
- Dash - dot
- Dash - dot - dot
Width - setting the thickness of the indicator line.
Efficiency Ratio period - the number of periods for the efficiency ratio.
Short period - number of periods for the fastest exponential moving average.
Long period - number of periods of the slowest exponential moving average.
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