Reactive Moving Average
Indicator
263 downloads
Version 1.0, Jan 2025
Windows, Mac
5.0
Reviews: 1
Description
๐ Signal Moving Average ๐
The Signal Moving Average is an indicator that combines a Simple Moving Average (SMA) with a dynamic correlation calculation to better adapt to market conditions. ๐ฏ This indicator adjusts its sensitivity based on the strength of the trend, making it a powerful tool for identifying trends and filtering out market noise. ๐
Key Features ๐
๐ Adjusted Moving Average:
- The moving average line dynamically adjusts based on the correlation between price and time.
- In strong trending markets, the moving average moves faster to follow the price. ๐
- In sideways markets, the moving average remains more stable, reducing false signals. ๐
๐ข Correlation Calculation:
- The indicator calculates the correlation between price and time using the Pearson formula.
- It adjusts the moving average based on the coefficient of determination (Rยฒ). ๐งฎ
๐ Visualization:
- Clear and intuitive display for easy interpretation. ๐๐
How to Use the Indicator ๐ ๏ธ
๐ Trend Identification:
- Bullish Trend: When the price is above the correlated moving average. ๐
- Bearish Trend: When the price is below the correlated moving average. ๐ป
โ Signal Confirmation:
- Use the adjusted moving average as a dynamic support or resistance level. ๐ก๏ธ
- Combine this indicator with other technical tools to confirm signals. ๐
Moving Average Adjustment โ๏ธ
The algorithm adjusts the moving average based on the value of Rยฒ:
- If Rยฒ > 0.5 (significant correlation):
- The moving average is adjusted using a weighted combination between the current SMA value and the previous value of the adjusted moving average (_ma).
- The weighting depends on the value of Rยฒ. โ๏ธ
- If Rยฒ โค 0.5 (non-significant correlation):
- The moving average is adjusted by subtracting a value proportional to the absolute difference between the current SMA value and the previous value of the adjusted moving average. ๐
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Summary
AI summary
The Reactive Moving Average is a technical indicator that integrates a Simple Moving Average (SMA) with a dynamic correlation calculation to adapt to changing market conditions. It adjusts its sensitivity based on the strength of the trend, enhancing trend identification and reducing market noise.
Key functionalities include:
- **Adjusted Moving Average**: The moving average line dynamically adapts according to the correlation between price and time. It accelerates in strong trending markets to closely follow price movements and stabilizes in sideways markets to minimize false signals.
- **Correlation Calculation**: Utilizes the Pearson formula to compute the correlation between price and time, adjusting the moving average based on the coefficient of determination (Rยฒ).
- **Moving Average Adjustment**: When Rยฒ is greater than 0.5, the moving average is updated using a weighted combination of the current SMA and the previous adjusted value, with weights depending on Rยฒ. For Rยฒ less than or equal to 0.5, adjustments are made by subtracting a value proportional to the difference between the current SMA and prior adjusted average.
- **Visualization**: Provides a clear and intuitive display for easy interpretation.
Usage involves identifying bullish trends when price is above the adjusted moving average and bearish trends when below. The indicator can also serve as a dynamic support or resistance level and be combined with other technical tools for signal confirmation.
Key functionalities include:
- **Adjusted Moving Average**: The moving average line dynamically adapts according to the correlation between price and time. It accelerates in strong trending markets to closely follow price movements and stabilizes in sideways markets to minimize false signals.
- **Correlation Calculation**: Utilizes the Pearson formula to compute the correlation between price and time, adjusting the moving average based on the coefficient of determination (Rยฒ).
- **Moving Average Adjustment**: When Rยฒ is greater than 0.5, the moving average is updated using a weighted combination of the current SMA and the previous adjusted value, with weights depending on Rยฒ. For Rยฒ less than or equal to 0.5, adjustments are made by subtracting a value proportional to the difference between the current SMA and prior adjusted average.
- **Visualization**: Provides a clear and intuitive display for easy interpretation.
Usage involves identifying bullish trends when price is above the adjusted moving average and bearish trends when below. The indicator can also serve as a dynamic support or resistance level and be combined with other technical tools for signal confirmation.
Indicator profile
Customer reviews
5.0
Reviews: 1
5 | 100 % | |
4 | 0 % | |
3 | 0 % | |
2 | 0 % | |
1 | 0 % |
Customer reviews
August 12, 2025
Pros: Adaptive moving average combining SMA with dynamic correlation to reduce lag and smooth price noise. Flexible sensitivity settings. Cons: No alerts or tooltips. No template saving. Can produce noise on low-end PCs or very short timeframes.
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Since 03/10/2024
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