The Natural Moving Average was created by Jim Sloman (Ocean Theory pgs 63-70) and this is the one of the best moving averages you will find! This is one of the most adaptive moving averages that I have ever seen that accounts for all types of volatility. I have included a default value of 40 for the length so you can see just how close this moving average sticks to the underlying price movements. Feel free to try out your own lengths to see what you like best. I have included strong buy and sell signals in addition to normal ones so darker colors mean strong signals and lighter colors mean normal ones. Buy when the line turns green and sell when it turns red.
Let me know if there are any other scripts you would like to see me publish!
What is the purpose of moving average this adaptive?
cheatcountry
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@greenmask9, either using it by itself to confirm a trend or using a slower version alongside it to create a profitable trading system. Those would be my suggestions anyway
OrcChieftain
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@cheatcountry, Oh, that was a quick reply. Well, yes, but if it adapts so fast, perhaps a bar color change would do the same trick. I am sure it can find some role in some system, but it wouldn't be my preferred choice.
cheatcountry
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@greenmask9, yeah I have been getting alot of requests for very adaptive moving averages to deal with choppy markets and scalping so I have been trying to focus on those lately
OrcChieftain
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@cheatcountry, I saw your ultimate moving average. I am curious if someone shares a system with moving averages like these. The furthest I went on adaptability was the T3 moving average and eventually, I stopped using all non-common calculations.
cheatcountry
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@greenmask9, I have been told by multiple users so far that they have been using my ultimate moving average and it has been profitable for them
maxbli768
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thank you very much for the script, i am a little confused about one place, nma = (src * ratio) + (nz(src[1]) * (1 - ratio)), should we use (nz(nma[1]) instead?