Slope Adaptive Moving Average (MZ SAMA)

The Slope Adaptive Moving Average (MZ SAMA) indicator provides a trend-following smoothing mechanism that utilizes slope filtering to dynamically detect price momentum, consolidations, and trend reversals.

Usage

The Usage section describes how the script can be used to identify market states and execution points. The indicator primarily functions by color-coding the moving average line based on its calculated slope to represent three distinct market conditions:

• Green: Indicates a strong uptrend with positive price momentum.
• Red: Indicates a strong downtrend with negative price momentum.
• Blue (Default): Indicates a "Chop Zone" where the market is sideways, consolidating, or experiencing a potential reversal.

Users can utilize the integrated Buy and Sell signals which trigger when the slope moves out of the consolidation area into a trending state. While the absolute alert timing often provides the most precise entry, the trend condition (color) can be used to manage trailing stops or identify mid-trend entries.

Details

The script is inspired by Vitali Apirine's work on Adaptive Moving Averages (AMA) and functions as a refined version of the Dynamic Volume Adaptive Moving Average (DVAMA). Unlike traditional AMAs that only adjust smoothing based on volatility, the MZ SAMA incorporates a slope-filtering algorithm to improve trend health detection.

The calculation involves a specialized alpha value derived from the relationship between the recent highest high and lowest low over a user-defined length. This alpha is squared to create a non-linear sensitivity to price changes. The slope itself is calculated by converting price changes into an angular representation (degrees), which is then compared against a user-defined "Consolidation Area" threshold to filter out market noise.

Settings

SAMA Length Inputs

• Chart Resolution: Allows the user to calculate the indicator based on a timeframe different from the current chart.
• Source: The price input used for the calculation (default is Close).
• Adaptive MA Length: The lookback period used to determine the highest and lowest values for the efficiency ratio.
• Major Length: The slow smoothing constant used in the alpha calculation.
• Minor Length: The fast smoothing constant used in the alpha calculation.

Slope and Dynamic Coloring Parameters

• Slope Period: The period used to calculate the angle of the moving average.
• Slope Initial Range: A scaling factor used to normalize the slope calculation.
• Consolidation area is when slope below: The degree threshold; if the slope angle is below this value, the trend is considered neutral/choppy.
• Bull/Bear/Consolidation Color: Customization options for the visual output of the trend states.

Plot Parameters

• Show Signals on Chart: Toggles the visibility of the "Buy" and "Sell" triangle labels.

FAQ

How do I interpret the blue sections of the moving average? The blue sections represent areas where the slope angle is below the "Consolidation area" threshold, suggesting the market is currently sideways or lacking sufficient momentum for a directional trade.

What timeframe is best for the default settings? The default AMA length of 200 is optimized for higher timeframes, specifically the 1-hour chart and above. For lower timeframes, users may want to decrease the Adaptive MA Length.

How can I access the Slope Adaptive Moving Average (MZ SAMA)? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.