Triple Exponential Moving Average (TEMA) Forex Technical Analysis and TEMA Forex Trading Signals
Developed by Patrick Mulloy.
This indicator was originally used for technical analysis in the Stock exchange and Commodities exchange market before being used in Forex trading technical analysis.
This a trend following indicator, it was intended to lessen the lag of the original exponential moving average.
The calculation is based on three EMAs:
- a single EMA
- a double EMA and
- a triple EMA
The three EMAs when combined produce a lesser amount of lag than any of the three EMAs.
Forex Technical Analysis and Generating Forex Trading Signals
The TEMA Forex technical indicator can be traded in the same way as the original moving averages
The most popular technical analysis method of generating trading signals is to compare the moving average line and the price action of the currency pair.
- A buy signal is generated when both the price and the indicator are moving upwards while
- A sell signal is generated when the price and the indicator are both moving downwards.
Buy Sell Signal
Another popular technical analysis method of TEMA is the crossover system.
The TEMA crossover system includes two or more triple exponential moving averages crossing above/below each other to generate trading signals. One indicator has fewer periods than the other. This system will also include combining it with other indicators as additional entry confirmation signals