SMCCI is an improved moving average that shows the trend direction. It uses advanced smoothing techniques to achive a better moving average, eliminating usual problems associated with moving averages, like lag and whip-saws.
SMCCI is less responsive to false price moves and captures the overall trend direction. Price above the SMCCI line indicates up trend and price below the line indicates down trend.
The SMCCI can be used to develop trading strategies. The image compares a 96 period SMCCI and a exponential moving average. The red line is EMA and teal line is SMCCI. SMCCI signals trend reversal earlier than the EMA. With SMCCI, the number of whip-saw trades are reduced. Check the grey box area in chart. The SMCCI can be customized through the parameters, period and smoothing factor b.
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