Discover the 3rd Generation Moving Average for MT4
The 3rd Generation Moving Average is a cutting-edge twist on the classic moving average (MA) indicator designed specifically for MetaTrader 4. This advanced tool employs a straightforward method to reduce lag by utilizing a longer MA period, making it a must-have for traders looking to sharpen their edge.
The concept was first introduced by M. Duerschner in his article Gleitende Durchschnitte 3.0. This version operates with λ = 2, which optimally minimizes lag. Keep in mind that a higher λ value will make it more akin to the traditional moving average. The great news? It’s available for both MT4 and MT5, and you won’t need any DLLs to get started!
Input Parameters
- MA_Period (default = 50): This parameter defines the period for the 3rd Generation Moving Average.
- MA_Sampling_Period (default = 220): The sampling period should be at least four times greater than the MA_Period.
- MA_Method (default = MODE_EMA): Choose the method for calculating the moving average.
- MA_Applied_Price (default = PRICE_TYPICAL): This sets the price used for the moving average calculation.
As illustrated in the chart, the 3rd Generation MA (red line) exhibits slightly less lag compared to the conventional EMA (blue line), allowing it to respond more swiftly to price fluctuations. However, it's important to note that it can still lag and may occasionally produce false signals.
You can utilize the 3rd Generation Moving Average just like the standard moving average — it’s a reliable tool for identifying the current trend direction.
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