Description:
The Kaufman Adaptive Moving Average (KAMA) is a technical analysis indicator developed by the American quantitative financial theorist Perry J. Kaufman in 1998. KAMA is a trend-following indicator that uses a series of calculations to adapt to market conditions and reduce noise. KAMA adjusts its sensitivity to price movements based on the volatility of the market, making it more responsive to sudden changes in trends.
Input Parameters:
- Length: The number of periods used in the calculation.
- Fast: A faster moving average.
- Slow: A slower moving average.
- Offset: The offset value is used to access the data of any candle or indicator with reference to the current candle, to access the current candle data we will use the offset value of "0", to access previous candle data "-1" offset value will be used.
- Price Source: The specific data points (such as open, high, low, or close) from each candle in a financial chart that an indicator uses for mathematical computations, enabling the calculation of metrics like the average over a specified period.
Use Cases:
- Trend Identification: This indicator can reduce the lag in trend identification by adapting to changing market conditions. This allows it to react more quickly to price movements and is particularly useful in volatile markets.
- Reduce Noise: This indicator can provide enhanced smoothing and noise reduction capabilities, which can help traders identify more reliable trends and signals.
This feature can be used in:
- Market Scanner
- Strategy Tester
- Multi-Factor Alerts
- Dynamic Alerts
- Smart Checklist
Do you want to learn more? Check out our Learning Center Article.
May 13, 2024