Triple Moving Average Indicator

#trendfollowing #movingaverage #crossover 

Inventor:  

Three moving averages of different speeds – fast, medium and slow. The extra average adds a confirmation layer over the double MA system: the fast line gives the alert, the medium line confirms it, and the slow line defines the trend everything must respect. Fewer false signals than a double MA, at the cost of later entries. 

Default period: 5, 15, 20 (short-term) or 10, 50, 200 (positional) 

All three stacked fast above medium above slow indicates full uptrend. Stacked the opposite way indicates full downtrend. 

Useful readings: 

Fast crosses above medium: First alert of a turn up 

Fast and medium both above slow: Turn confirmed, uptrend on 

Perfect bullish stack (fast > medium > slow): Strongest trend condition, hold longs 

Fast crosses back below medium in a stack: First warning, tighten stops 

Averages braided together: Sideways market, ignore all crosses 

The slow average is the boss: trade only on its side 

Objective rules: 

Bullish: Fast MA crosses above medium MA AND both are above the slow MA. 

Bearish: Fast MA crosses below medium MA AND both are below the slow MA. 

Long exit: Fast MA crosses back below the medium MA 

Short exit: Fast MA crosses back above the medium MA 

Boss filter: Never take longs below the slow MA, never take shorts above it 

What makes it unique: 

The third average adds a hierarchy: alert, confirmation, and a boss line that outranks both. It formalizes the discipline of trading only with the higher-order trend. 

The indicator table value in TradePoint & RZone also provides you with a list of all values of this indicator for any group of stocks. This will allow you to compare the readings of this indicator across different stocks.

This indicator is also available in the System Builder on RZone & TradePoint for all charting methods. Using the system builder, you can develop various strategies based on the different conditions already present in this indicator. Additionally, it can be used with other indicators or price patterns to develop effective trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.

 

The indicator is applicable to all types of charting. It is calculated based on the number of columns on P&F charts, bricks on Renko charts, lines on Line-break charts, candles on Heikin-Ashi charts, and lines on Kagi charts. While the formula and reading of the indicators remain the same, they become more dynamic on these charts.