Introducing the Relative Moving Average (RMA) indicator, now available for cTrader!
The Relative Moving Average (RMA) — also known as the Smoothed Moving Average (SMMA) — is a type of moving average that aims to reduce lag while maintaining smoothness in the curve. It’s the same formula used by TradingView’s built-in “RMA” function, which is widely used in popular indicators like the Relative Strength Index (RSI).
The RMA is designed to balance between responsiveness and stability. It updates more smoothly than an Exponential Moving Average (EMA) but reacts more quickly to price changes than a Simple Moving Average (SMA).
How It Differs:
- The SMA averages all prices equally, causing lag and choppiness.
- The EMA gives more weight to recent prices, making it very responsive but sometimes noisy.
- The RMA, in contrast, blends the benefits of both: it smooths out volatility while maintaining timely reactions to price shifts.
Practical Use:
Traders often use the RMA as a smoother trend line or as part of momentum indicators. It’s particularly effective when you want to filter noise without introducing significant lag — ideal for confirming longer-term trends or supporting overbought/oversold analyses.
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