RMA

What is the RMA?

The RMA (running moving average) is the recursive smoother J. Welles Wilder introduced in his 1978 book New Concepts in Technical Trading Systems, which is why it also goes by Wilder smoothing or the smoothed moving average (SMMA). Each bar it keeps (N-1)/N of its previous value and blends in 1/N of the new price: multiply yesterday's RMA by N-1, add today's value, divide by N. That makes it an EMA in disguise, just with a smaller smoothing factor: alpha equals 1/N instead of the standard 2/(N+1).

The consequence is that an N-period RMA is markedly slower than an N-period EMA; equating smoothing factors shows a 14-period RMA responds like a 27-period EMA (2N-1 in general). That matters less as a stand-alone line than as plumbing: RMA is the smoothing inside RSI's average gain and loss, ATR, and the ADX / DMI system. Wilder chose it because the recursion was easy to update by hand in 1978. Swap in a different average and those indicators still compute, but their values and feel change.

How to calculate the RMA

The formula is a one-line recursion; the details that matter are the seed and the smoothing factor.

1. 1Seed it: take the simple average of the first N values (Wilder's own method) as the starting RMA. Platforms differ slightly here, which is why early-history values can disagree.
2. 2Update each bar: multiply the previous RMA by N-1, add the current value, and divide by N. Equivalently, new RMA = previous + (price - previous)/N.
3. 3Sanity-check it: the result should match an EMA whose smoothing factor is exactly 1/N, apart from seeding differences on the earliest bars.

How traders use it

• Inside Wilder's indicators: RSI, ATR, and ADX all smooth their raw components with the RMA. Reproducing textbook or platform values requires it; substituting an EMA or SMA yields a more nervous or choppier indicator.
• As a slow trend baseline: SMMA lines are used where a calm, rarely-flipping reference is wanted, with price's position or the line's slope supplying the bias.
• In crossover systems built for patience: pairs of RMAs flip far less often than same-length EMA pairs, trading responsiveness for fewer whipsaws.
• As a porting detail: when translating a strategy between platforms, identifying whether a 'smoothed MA' means the RMA prevents silent changes in signal timing.

RMA vs EMA and SMA