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The DDAdaptiveEMA is an innovative VertexFX client-side indicator that trades in the direction of the trend.
As the name suggests, DDAdaptiveEMA is based on the Exponential Moving Average (EMA). However, unlike the EMA which has lag, the DDAdaptiveEMA indicator reduces the lag in order to provide better trade entries and exits. The DDAdaptiveEMA is based on two components, namely the Dual Differentiator (DD) filter, and an Adaptive EMA. Hence the name DDAdaptiveEMA.
In the first step, we calculate the phase (cycle period) of the price using the Dual Differentiator filter. It provides the optimal phase period over the recent FILTER_PERIOD. In the next step we calculate the EMA based on this optimal phase period. Since the optimal phase period can very for each bar the EMA for each bar may be calculated based on a different period. Hence the name Adaptive EMA.
Unlike using fixed period EMA, by employing adaptive EMA the indicator responds to the price changes faster and reduces the lag.
When the adaptive EMA is rising, the indicator is painted BLUE, whereas when it is falling it is painted RED. This ensures that traders enter BUY trades in rising markets and SHORT trades in falling markets.
BUY / EXIT SHORT - Enter LONG (or exit SHORT) when the DD Adaptive EMA indicator turns BLUE. The stop-loss can be set to the nearest Swing Low. Traders are advised to employ a trailing stop when the trade turns profitable.
SHORT / EXIT LONG - Enter SHORT (or exit LONG) when the DD Adaptive EMA indicator turns RED. The stop-loss can be set to the nearest Swing High. Traders are advised to employ a trailing stop when the trade turns profitable.
As the name suggests, DDAdaptiveEMA is based on the Exponential Moving Average (EMA). However, unlike the EMA which has lag, the DDAdaptiveEMA indicator reduces the lag in order to provide better trade entries and exits. The DDAdaptiveEMA is based on two components, namely the Dual Differentiator (DD) filter, and an Adaptive EMA. Hence the name DDAdaptiveEMA.
In the first step, we calculate the phase (cycle period) of the price using the Dual Differentiator filter. It provides the optimal phase period over the recent FILTER_PERIOD. In the next step we calculate the EMA based on this optimal phase period. Since the optimal phase period can very for each bar the EMA for each bar may be calculated based on a different period. Hence the name Adaptive EMA.
Unlike using fixed period EMA, by employing adaptive EMA the indicator responds to the price changes faster and reduces the lag.
When the adaptive EMA is rising, the indicator is painted BLUE, whereas when it is falling it is painted RED. This ensures that traders enter BUY trades in rising markets and SHORT trades in falling markets.
BUY / EXIT SHORT - Enter LONG (or exit SHORT) when the DD Adaptive EMA indicator turns BLUE. The stop-loss can be set to the nearest Swing Low. Traders are advised to employ a trailing stop when the trade turns profitable.
SHORT / EXIT LONG - Enter SHORT (or exit LONG) when the DD Adaptive EMA indicator turns RED. The stop-loss can be set to the nearest Swing High. Traders are advised to employ a trailing stop when the trade turns profitable.
