Adaptive Moving Average

Created by Perry Kaufman and explained in his book “Smarter Trading”, Adapting Moving Average is a technical indicator that aims to address the weaknesses of Simple Moving Averages (SMA) and Exponential Moving Averages (EMA).

Instead of just averaging out a set number of closing prices (SMA) or doing this and weighting more recent data (EMA), adaptive moving averages replace the weighting of EMAs with something called an Efficiency Ratio.

All this means is that the resulting trend line is less sensitive to recent prices and so, theoretically, winning trades can be allowed to run for longer before receiving a signal to close them.

visa mastercard paypal transfer skrill sofort giropay trustly

Open your EverFX account

It takes only a few minutes and even fewer clicks to enter the promising and exciting world of trading. Take the first step by clicking on the link below.
Trading involves significant risk of loss
Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please consider our Risk Disclosure