Moving Average Converging
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Works on the Following Platforms
This indicator returns a moving average converging toward the price the more a trend makes new higher-highs or lower-lows depending on the detected trend.
Settings
- Length: Controls the initial moving average smoothing factor (2 / (Length + 1)), as well as the period of rolling maximums/minimums.
- Increment: Smoothing factor increment (2 / (Increment+ 1)) for new higher-high/lower-low, lower values would return a faster converging moving average.
- Fast: Fast moving average smoothing factor.
Usage
The proposed moving average can be used like most slow moving averages.
Having a moving average able to converge closer to the price the longer a trend lasts allows users to obtain more timely crosses. This practice can remind us of the Parabolic SAR or our TRAMA indicator:
https://www.tradingview.com/script/p8wGCPi6-Trend-Regularity-Adaptive-Moving-Average-LUX/
Notice on the chart above how the moving average converges at an increasing rate with the occurrence of new high-highs/lower-lows.
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