Adaptive Moving Average
Adaptive Moving Average (AMA) Technical Indicator
Section titled “Adaptive Moving Average (AMA) Technical Indicator”The Adaptive Moving Average (AMA) Technical Indicator is a moving average that reduces sensitivity to price series noises and has minimal lag for trend detection. It was developed by Perry Kaufman in his book Smarter Trading.
Eliminating Disadvantages of Smoothing Algorithms
Section titled “Eliminating Disadvantages of Smoothing Algorithms”Many smoothing algorithms for price series can result in false trend signals due to accidental price leaps. Additionally, smoothing introduces lag in detecting trend stops or changes. The AMA indicator was specifically designed to address these disadvantages.