Moving Average Converging [LuxAlgo]

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:

Notice on the chart above how the moving average converges at an increasing rate with the occurrence of new high-highs/lower-lows.

Versionsinformation:

Minor fix

Versionsinformation:

Minor changes.