OPEN-SOURCE SCRIPT
RedK Smooth And Lazy Moving Average (SALMA)
Updated
Here's a quick and simple script that produces yet another Smooth and Lazy Moving Average - SALMA - that helps hide noise caused by extreme price fluctuations to enable better trend visualization and tracking
Concept:
===========
SALMA is based on a simple concept - we calculate a standard deviation channel of a user-selected width - then correct the price value so that it is restricted within the boundaries of the SD channel - effectively adjusting against high-volatility, sudden price moves - which acts as a pre-smoothing of the price values - then we calculate our moving average and apply extra smoothing as needed.
Since only "persistent" price moves will have an effect on the direction of this MA, it will be suitable to use as an additional trend guide with other indicators, and to consider only long positions when the price is above the SALMA, and short positions only when the price is below
Notes:
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- for the time being, i'm using Weighted Moving Average (WMA) for the calculation of the base price MA and the SD channel - we can add other MA types as options in a future versions based on feedback
- will add alerts in a future update
- SALMA can be used with any timeframe. can also be set to a higher timeframe against a lower timeframe chart
i have also added couple of standard moving average lines (choose between SMA, EMA and WMA) of selectable lengths - to enable utilizing this in a Moving Average cross-over setup - or to simply monitor other common MA's that other traders are using.
here's how the settings look like when you add SALMA to your chart
Please feel free to play around with SALMA and share feedback :)
Concept:
===========
SALMA is based on a simple concept - we calculate a standard deviation channel of a user-selected width - then correct the price value so that it is restricted within the boundaries of the SD channel - effectively adjusting against high-volatility, sudden price moves - which acts as a pre-smoothing of the price values - then we calculate our moving average and apply extra smoothing as needed.
Since only "persistent" price moves will have an effect on the direction of this MA, it will be suitable to use as an additional trend guide with other indicators, and to consider only long positions when the price is above the SALMA, and short positions only when the price is below
Notes:
========
- for the time being, i'm using Weighted Moving Average (WMA) for the calculation of the base price MA and the SD channel - we can add other MA types as options in a future versions based on feedback
- will add alerts in a future update
- SALMA can be used with any timeframe. can also be set to a higher timeframe against a lower timeframe chart
i have also added couple of standard moving average lines (choose between SMA, EMA and WMA) of selectable lengths - to enable utilizing this in a Moving Average cross-over setup - or to simply monitor other common MA's that other traders are using.
here's how the settings look like when you add SALMA to your chart
Please feel free to play around with SALMA and share feedback :)
Release Notes
RedK Smooth and Lazy MA (SALMA v2.0) introduces couple of improvements mainly, the ability to manage the volatility filter (SD Channel) length separately from the MA length...... SALMA relies on a volatility filter (a Standard Deviation channel) to "rationalize" price values and restrict big price moves during volatility spikes - in SALMA v1.0, we used the same length settings to calculate both the SD channel and the final Moving Average .. in SALMA v2.0, we introduce the ability to determine the length of that SD-based volatility filter independently - as we can see, the outcome is, we can improve the responsiveness of the final MA and tweak how much of it we sacrifice in favor of smoothness - which gives more flexibility to the indicator.
Here's a comparison between SLAMA v1.0 and V2.0 with the same settings when using a slightly faster volatility filter
- other code improvements and variable naming corrections..
- what's next (depends on feedback):
Alerts (if needed(
a "light version" that can be used to smoothen other indicators (using the indicator-on-indicator feature in TV)
Release Notes
SALMA v3.0 now includes alerts as requested by fellow TV followers.. with some minor code clean-ups. Alerts are available for detecting a Swing Up, Swing Down, and/or any Swing.
Enjoy !!
Open-source script
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in publication is governed by House rules. You can favorite it to use it on a chart.
Disclaimer
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