Triangular Moving Average

The Triangular Moving Average indicator provides a double-smoothed price average that emphasizes the middle portion of the data window to reduce market noise and identify trend direction with greater stability than standard moving averages.

Usage

The Usage section describes how the script can be used to interpret market trends. The indicator functions as a trend-following tool where the slope of the average determines the current market bias.

• Trend Identification: Users can look at the direction of the TMA line to determine the prevailing trend. A rising line suggests bullish momentum, while a falling line suggests bearish momentum.
• Slope Highlighting: When the "Highlight Movements" setting is enabled, the indicator changes color based on its slope. A green line indicates the TMA is increasing, while a red line indicates it is decreasing.
• Support and Resistance: Like other moving averages, the TMA can act as a dynamic level of support or resistance during trending markets.

Details

The Triangular Moving Average (TMA) is essentially an average of an average. Unlike a Simple Moving Average (SMA) which applies equal weight to all prices in the period, or an Exponential Moving Average (EMA) which weights recent prices more heavily, the TMA applies the most weight to the middle of the time series.

The calculation involves taking a Simple Moving Average of a previously calculated Simple Moving Average. Specifically, it uses a window of math.ceil(length / 2) for the first SMA and math.floor(length / 2) + 1 for the second. This results in a line that is much smoother and less reactive to outliers or "whipsaws" than a standard SMA of the same length. This script is a refactored version of the original work by Alex Orekhov (everget).

Settings

• Length: The lookback period used for the calculation. Higher values result in more smoothing but increased lag.
• Highlight Movements: A toggle to enable or disable color changes based on the slope of the TMA.
• Source: The price data used for the calculation (e.g., Close, Open, High, Low).

FAQ

What makes the Triangular Moving Average different from a Simple Moving Average?

The TMA is double-smoothed, meaning it undergoes two rounds of averaging. This creates a much smoother curve that is less susceptible to temporary price spikes compared to a standard SMA.

Can I use the TMA for trade signals?

While the TMA is primarily used for trend identification, traders often look for color changes (slope reversals) or price crossovers as potential signals for trend shifts or entries.

How can I access the Triangular Moving Average?

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