Three Simple Moving Averages

The Three Simple Moving Averages indicator provides a streamlined way to plot three independent simple moving averages on a single chart to identify trend direction and potential crossover signals while optimizing indicator space.

Usage

The Usage section describes how the script can be used to analyze market trends and momentum. By plotting multiple Simple Moving Averages (SMA) simultaneously, traders can identify the relationship between short-term, medium-term, and long-term price action.

Common use cases include:

• Trend Identification: Determining the market bias by observing the slope of the SMAs and the position of the price relative to the lines.
• Crossover Analysis: Monitoring for "Golden Crosses" (shorter SMA crossing above a longer SMA) or "Death Crosses" (shorter SMA crossing below a longer SMA).
• Dynamic Support and Resistance: Using the SMA lines as areas where price may find support in an uptrend or resistance in a downtrend.

Users can toggle the second and third SMAs on or off depending on their specific strategy requirements, allowing for a cleaner chart interface when only one or two averages are needed.

Details

The script calculates the arithmetic mean of a specified price source over a user-defined number of periods. Unlike Exponential Moving Averages (EMA) which prioritize recent data, the Simple Moving Average (SMA) assigns equal weight to all data points within the period, providing a smoother line that is less sensitive to short-term volatility.

This implementation is a refactored version of the original concept by @DeXTeR323i. It includes built-in alert logic for crossovers between the first and second SMA, as well as the second and third SMA, enabling automated notifications when trend shifts occur.

Settings

• Enable 2nd MA: Toggles the visibility of the second Simple Moving Average.
• Enable 3rd MA: Toggles the visibility of the third Simple Moving Average.
• Length: Sets the lookback period for the first SMA (Default: 50).
• Length 2: Sets the lookback period for the second SMA (Default: 100).
• Length 3: Sets the lookback period for the third SMA (Default: 200).
• Source: Determines the price data used for the first SMA calculation (e.g., Close, Open, High, Low).
• Source 2: Determines the price data used for the second SMA calculation.
• Source 3: Determines the price data used for the third SMA calculation.

FAQ

Can I use different price sources for each moving average? Yes, the script allows you to independently select the source (such as Close, High, or HL2) for each of the three moving averages in the settings menu.

Does this indicator provide alerts for crossovers? Yes, the indicator includes automated alerts that trigger when the first SMA crosses the second, or when the second SMA crosses the third.

How do I access the Three Simple Moving Averages indicator? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.