What is the Recursive Moving Average?
The Recursive Moving Average (RMA) is a unique indicator that enhances your trading strategy by calling itself multiple times to achieve optimal smoothing. Think of it as taking your average to the next level! Indicators like DEMA (Double Exponential Moving Average) and TEMA (Triple Exponential Moving Average) are examples of this recursive approach. The main aim here is to eliminate the loop limit while ensuring high-speed performance, and to top it off, it includes a trigger line that signals when to trade.
Understanding the Parameters
When setting up your RMA, you’ll want to consider the following parameters:
- Regular Period: This defines the length of the moving average.
- Number of Iterations: The more iterations you set, the smoother the output will be.
- Smoothing Method: Choose between exponential smoothing or simple smoothing to keep things quick.
- Signal Arrow: Optionally, you can enable an arrow to be drawn at the signal point for easier visualization.
Key Features of the RMA
This indicator comes packed with features that can make a big difference in your trading:
- Trigger Line: This represents the average sum of smoothing iterations. When the RMA crosses this line, it's a signal to enter a trade.
- Signal Arrow: You have the option to display an arrow at the point of a trading signal, making it easy to spot opportunities.
As a best practice, be cautious with the parameters you set. You don’t want your chart to be cluttered with signals. This version of the RMA is designed to handle open bar prices only, keeping your analysis straightforward.
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