This script measures the Signal to Noise ratio of a security and plots it in deciBels scale!
Ideally, you would want the ratio to be above 10 dB, meaning the Signal strength is 10x the noise strength.
As a baseline, you should not rely on indicators that use any kind of moving average if the SNR is below 6 dB - meaning Signal strength is only 4x noise...
"There are various ways to detect trends with moving averages. The moving average is a rolling filter and uptrends are detected when either the price is above the moving average or when the moving average’s slope is positive.
Given that an SMA can be well approximated by a constant-α AMA, it makes a lot of sense to adopt the AMA as the principal representative of...