TASC 2025.03 A New Solution, Removing Moving Average Lag

The TASC 2025.03 A New Solution, Removing Moving Average Lag indicator implements a novel technique by John Ehlers to eliminate the inherent delay in moving averages by using linear regression projections.

Usage

The Usage section describes how the script can be used to identify market trends and potential turning points. The indicator outputs several components on the chart and in a separate pane to help traders visualize price momentum without the standard lag associated with traditional moving averages.

• Trend Identification: Comparing the Projected Moving Average (PMA) to the Simple Moving Average (SMA) helps identify the current trend. When the PMA is above the SMA, the trend is considered bullish; when below, it is bearish.
• Signal Generation: Crossings between the prediction lines and their respective base values (PMA or Slope) can serve as early indicators of price reversals.
• Visual Cues: The indicator uses a color gradient fill between the SMA and PMA. A green gradient signifies bullish momentum, while a red gradient signifies bearish momentum. The prediction plots change color (green or red) based on their directional slope to highlight potential trade opportunities.

Details

The script is based on the concept that a standard SMA lags behind price by exactly half its length because the average represents the midpoint of the data block. To counteract this, John Ehlers introduces the Projected Moving Average (PMA).

The PMA is calculated by taking the SMA and adding the product of the linear regression slope and half the data length. This creates a first-order prediction that shifts the average forward in time, effectively removing the lag.

Furthermore, the indicator includes second-order and fourth-order difference calculations to create "Predict" versions of both the PMA and the Slope. The formulas used are:

• PMA: SMA + (Slope * Length / 2)
• Predict PMA: PMA + 0.5 * (Slope - Slope[2]) * Length
• Predict Slope: 1.5 * Slope - 0.5 * Slope[4]

The implementation utilizes efficient built-in Pine Script functions like ta.linreg() and ta.sma() to ensure optimal performance without the need for heavy computational loops.

Settings

• Source: Determines the price data used for the calculations (e.g., Close, Open, HL2).
• Length: Sets the lookback period for the SMA and linear regression slope calculations.
• 0 line: Adjusts the color of the zero baseline in the slope pane.
• Source Color: Sets the color of the source price plot (hidden by default).
• PMA/Slope Color: Sets the base color for the PMA and Slope lines.
• Predict Colors: A toggle for the colors used when the prediction is moving upward or downward.
• Fill Colors: Adjusts the colors used for the gradient area between the PMA and SMA.

FAQ

How do I interpret the crossing of the PMA and SMA? A crossover where the PMA moves above the SMA typically suggests a transition to bullish momentum, while a crossunder suggests bearish momentum.

What is the "Predict" line used for? The Predict line is a higher-order calculation designed to react even faster than the PMA. Traders often look for the Predict line to cross the PMA as an early signal of a trend change.

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.