Ehlers Triangle Moving Average

The Ehlers Triangle Moving Average indicator provides a smoothed trend-following filter by applying a triangular weighting distribution to price data to help identify momentum shifts and trend direction.

Usage

The Ehlers Triangle Moving Average is primarily used to identify trend direction and momentum strength through its color-coded output. Traders can interpret the indicator as follows:

• Bullish Trend: When the plot is green, the market is in a bullish state. A dark green line indicates a "Strong Buy" signal, suggesting price momentum is increasing significantly above the average. A light green line indicates a standard bullish signal.
• Bearish Trend: When the plot is red, the market is in a bearish state. A dark red line indicates a "Strong Sell" signal, suggesting price momentum is accelerating below the average. A light red line indicates a standard bearish signal.
• Bar Coloring: If enabled, the price bars on the chart will match the color of the indicator, providing a clear visual representation of the current trend state.

Traders often use the transition from red to green as a long entry trigger and the transition from green to red as a short entry or exit signal.

Details

The script is based on the windowing concepts developed by John Ehlers. Unlike a Simple Moving Average (SMA) which applies equal weight to all prices in a period, or an Exponential Moving Average (EMA) which focuses on recent data, the Triangle Moving Average uses a custom weighting system.

The calculation determines the weight of each price point based on its position within the lookback length. It creates a triangular distribution where prices toward the middle of the period are given specific weights, resulting in a smoother output that filters out market noise while remaining responsive to price action. The signal logic is derived from the difference between the current source price and the calculated filter value; if the price is expanding rapidly away from the filter, a "strong" signal (represented by darker colors) is triggered.

Settings

• Source: The specific price data used for the calculation (e.g., Close, HLCC4).
• Resolution: Allows the indicator to be calculated on a different timeframe than the current chart.
• Allow Repainting: Determines if the indicator uses data from the current candle or waits for the candle to close to prevent repainting.
• Allow Bar Color Change: Toggles the ability for the indicator to change the color of the price bars on the chart.
• Length: The lookback period used for the triangular weighting calculation. Higher values result in more smoothing but more lag.

FAQ

What is the difference between the strong and normal signals?

Strong signals (darker colors) occur when the distance between the price and the moving average is increasing in the direction of the trend, indicating higher momentum. Normal signals (lighter colors) indicate the trend is maintained but with less acceleration.

How does the weighting differ from a standard SMA?

A standard SMA applies equal weight to all bars. The Ehlers Triangle Moving Average uses a triangular weight distribution, giving different importance to prices based on their position in the lookback window to reduce noise.

How do I access this indicator?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.