Tillson T3 Moving Average MTF

The Tillson T3 Moving Average MTF indicator provides a multi-timeframe version of the T3 moving average, offering a smoother and more responsive alternative to traditional moving averages for trend identification and market analysis.

Usage

The Usage section describes how the script can be used to identify trend direction and potential entry points. Because the T3 Moving Average uses a weighted sum of multiple EMAs, it reduces lag while maintaining a smooth curve, making it effective for both trending and ranging markets.

• Trend Identification: Users can determine the trend by observing the price location relative to the T3 line. If the price is above the T3 and the line is sloping upward (indicated by a color change), the trend is bullish. Conversely, if the price is below the T3 and the line is sloping downward, the trend is bearish.
• Multi-Timeframe Analysis: The indicator allows users to plot the T3 from a higher timeframe (e.g., Daily) onto a lower timeframe chart (e.g., 1-hour). This helps traders align their short-term trades with the broader market direction.
• Pullback Entries: In a trending market, the T3 line often acts as dynamic support or resistance. Traders may look for long entries when the price pulls back to the T3 during an uptrend, or short entries when the price rallies to the T3 during a downtrend.
• Crossover Signals: By enabling the "T3 Fibonacci Ratio Line," users can visualize two T3 averages with different settings. A crossover of the fast T3 over the slow T3 provides a bullish signal, while a crossunder provides a bearish signal.

Details

The T3 Moving Average was developed by Tim Tillson to address the lag associated with traditional moving averages without the volatility of a standard EMA. It achieves this through a calculation involving a triple EMA (DEMA, TEMA, etc.) and a "Volume Factor" (a).

The calculation uses a source price derived from (high + low + 2 * close) / 4. It then calculates six successive EMAs (e1 through e6). The final output is a linear combination of these EMAs using coefficients determined by the Volume Factor. This mathematical construction allows the indicator to stay closer to price action during trends while filtering out noise more effectively than a standard SMA.

Settings

• Time Frame: Specifies the timeframe from which the T3 values are calculated (e.g., 1D, 4H, Current).
• Show T3 Fibonacci Ratio Line?: Toggles the visibility of a second T3 line based on Fibonacci-derived parameters.
• T3 Length: The period used for the primary T3 calculation.
• Volume Factor: Controls the damping effect of the primary T3. A higher value makes the average more responsive but increases the risk of overshooting price.
• T3 Length fibo: The period used for the secondary (Fibonacci) T3 line.
• Volume Factor fibo: The Volume Factor used for the secondary T3 line, typically set to 0.618.

FAQ

How do I interpret the color changes on the T3 line?
The line changes color based on its slope: a green line indicates the T3 is increasing (bullish momentum), while a red line indicates the T3 is decreasing (bearish momentum).

What is the benefit of using the Volume Factor?
The Volume Factor allows you to fine-tune the smoothness and lag of the indicator. Smaller values result in a smoother line with more lag, while larger values (closer to 1) make the indicator faster and more reactive to price changes.

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