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Moving Average Converging

By LuxAlgoJul 25, 2022

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Moving Average Converging is a self-adjusting moving average that accelerates with trend persistence: each new higher high or lower low increments its smoothing factor, pulling the line toward price the longer the move endures. The starting factor follows the familiar exponential moving average form 2 / (Length + 1), and every fresh extreme steps it up by 2 / (Increment + 1), so conviction in the trend is literally built into the curve. A separate fast moving average is included for crossover work.

How to Trade the Moving Average Converging?

  • As the slow leg: deploy it wherever a traditional slow moving average would go; its convergence keeps it relevant late in a trend, when fixed lengths lag furthest behind.
  • Crossovers with the fast MA: because the converging line closes in on price as a trend matures, crosses fire earlier than they would against a fixed slow average, the tool's core advantage for timely signals.
  • Trailing behavior: as extremes stack up, the line hugs price much like a parabolic trailing system, which makes its distance from price a rough gauge of how established the trend is.

Moving Average Converging Settings

  • Length: sets the initial smoothing factor via 2 / (Length + 1) and the rolling period used to detect new maximums or minimums.
  • Increment: controls the smoothing-factor step 2 / (Increment + 1) applied on each new higher high or lower low; lower values make the average converge faster.
  • Fast: the smoothing factor of the fast moving average used for crossovers.

Frequently Asked Questions

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Also works on

TradingView
NinjaTrader
MetaTrader 4/5
Original indicatorBuilt in-house by LuxAlgo

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