What is the analysis and signal generation approach using the Triple Exponential Moving Average (TEMA)?
Developed & Created by Patrick Mulloy.
This tool was first used for analyzing stocks and commodities before it was used for analyzing charts in general.
This is a trading indicator that follows market trends, made to reduce the delay of the original and initial exponential MA.
The calculation is based on 3 EMAs:
- a single EMA
- a double EMA and
- a triple EMA
The 3 EMAs when combined produce a lesser amount of lag than any of the 3 EMAs.
Forex Analysis and How to Generate Trading Signals
The TEMA can be traded and transacted in a similar way as the original and initial Moving Averages
The most used technical analysis method for creating signals involves comparing the Moving Average line with the price changes of a currency pair.
- A buy signal gets derived/generated when both the price and the trading indicator are heading and moving upward while
- A sell signal gets derived and generated when the price and the indicator are both heading downward.
Buy Sell Trade Signal
Forex Crossover System
Another popular trading analysis method of TEMA is the crossover trading system.
The TEMA crossover method uses two or more triple exponential MAs that cross each other to create trading signals. One of these indicators uses a shorter time period than the other. This system will also use other indicators as extra confirmation for a trade.
Forex Crossover System
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