The ability the ( ) has to be flat during ranging markets and close to the price during trending markets is what make this moving average one of the most useful in . is calculated by using exponential averaging using the efficiency ratio (ER) as smoothing variable where 1 > ER > 0. An increasing efficiency ratio indicate a trending market. Based on one of my latest indicator (see Kaufman Adaptive Bands) i propose this modified that allow to emphasis the abilities of by powering the efficiency ratio. I also added a new option that allow for even more adaptivity.
The indicator is a simple of period length that use a powered ER with exponent factor.
When factor = 1 the indicator is a simple , however when factor > 1 there can be more emphasis on the flattening effect of .
You can also restrain this effect by using 1 > factor > 0
Note that when the exponent is lower than 1 and greater than 0 you are basically applying a nth square root to the value, for example pow(2,0.5) = sqrt(2) because 1/0.5 = 2, in our case :
pow(ER,factor > 1) < ER and pow(ER,1 > factor > 0) > ER
Self Powered P-KAMA
When the self powered option is checked you are basically powering ER with the reciprocal of ER as exponent , however factor does no longer change anything. This can give interesting results since the exponent depend on the market trend strength.
In orange the self powered of period length = 50 and in blue a basic powered with a factor of 3 and a period of length = 50.
Applying basic math to indicators is always fun and easy to do, if you have adaptive moving averages using exponential averaging try powering your smoothing variable in order to see interesting results. I hope you like this indicator. Thanks for reading !
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.
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You can also check out some of the indicators I made for luxalgo : https://www.tradingview.com/u/LuxAlgo/#published-scripts
Maybe this can be of a great help, perhaps by evaluating the angle of the kama or similar.
Anyway, another great 10-lines masterpiece!