DEMA (Double Expotential Moving Average) for MetaTrader4 – download
In this section you can download DEMA (Double Expotential Moving Average) for Metatrader4:
The file also includes MACD and RSI based on DEMA.
About DEMA – short introduction
Every trader is familiar with basic moving averages such as:
- Simple Moving Average (SMA)
- Expotential Moving Average (EMA)
- Linear Weighted Moving Average (LWMA)
- Smoothed Moving Average (SMMA)
SMA and EMA are the most popular one. They work nicely in a stock market, but in faster markets (or lower time frames) they tend to lag. That is why traders kept on improving averages and that is why we can use other types of averages. DEMA is one of them.
The double exponential moving average (DEMA) was developed by Patrick Mulloy to reduce the lag time. It was first described in 1994, in the Technical Analysis of Stocks & Commodities magazine in Mulloy’s article “Smoothing Data with Faster Moving Averages”.
DEMA can also be used in indicators which are based on moving averages (MACD, Bollinger Bands, others)
Differences between DEMA and other averages
Let’s take popular pair of 21 and 55 expotential averages:
And pair of 21 and 55 double expotential moving averages:
You can see that DEMA averages follow price more closely.
Installation of DEMA (Double Expotential Moving Average) in Metatrader4
About Double Exponential Moving Average (DEMA), how to use Double Exponential Moving Average (DEMA) in trading
In this report we will look at the Double Exponential Moving Average (DEMA) and what it is and how it can be used on the market.
The DEMA (Double Exponential Moving Average) is a technical indicator that is superior to the EMA (ExponentialMoving Average) in that it gives more weight to the current data points. TEMA uses essentially a single double exponential Moving Average (EEMA) and a Moving Average (TMA). The DMA is not simply a combination of the two EMAs together, but a two-dimensional moving average (DEMA), a multi-digit moving average (MMA) or even a three-dimensional moving average. Essentially, the Dema indicator is the result of a “simple double” or “exponential” sliding average resulting from the simple, double or exponential sliding average, and it is beyond the calculation of a single or double EMA.
Moving average strategies are better equipped to deal with false trading signals than a dual moving average crossover system. However, crossover strategies based on two simple moving averages and two double exponentially moving average crossover systems will compete in terms of trading performance.
We have previously looked at two moving averages and two exponentially moving average crossover systems and their impact on the performance of trading strategies.
We have already seen the simple moving average (SMA), calculated from the next most popular moving averages known as the exponential moving average (EMA). The DEMA (Moving average indicator) is not the same as a moving average line, but rather a line that moves in a different direction than the moving average line. Double Exponential Moving Average is often not available, we have already seen that it is the default on many platforms. As the name suggests, the double exponential moving average (DMA) is a faster version of the exponential moving average.
If you move your mouse over the line, you will see that the Double Exponential Moving Average (DEMA) has a value. The condition depends on a doubly remarkable smoothing factor used, the marker known as Double Exponential Moving Average, or DMA, as well as a few other factors.
There are many moving averages and we will shortly be introducing a simple trading system based on moving averages. We will also look at an easy-to-use trading tool called the Exponential Moving Average Indicator, which uses this method to assess trends in the Forex market. Shortly after, we will modify DEMA and its convergence to include a few other factors, such as the number of days in the month, the average of the previous day’s movements, and the percentage of movements above or below the current day. All kinds of moving averages, but they all rely on the same basic principle: convergence of a single point in time at the next point in time or the move.
A look back in time and an attempt to eliminate the delay associated with moving away by giving more weight to recent values. The Exponential Moving Average (EMA) and the Weighted Moving Average (WMA), both of which try to give the most recent price a greater weight compared to the Simple Moving Average. Similarly, the exponentially moving average and its weight assign to most – recent prices and observations – greater weights than the weight of the weighted average and less weight to the recent movements.
The exponentially moving average crossover strategy generates a trading signal when the short EMA crosses the long one. Double exponentialMoving Average Crossovers offer traders a more accurate way to represent larger – long-term trends. The TMA delay is better at responding to moving averages, because of the double averages, and this helps short-term traders quickly detect trend reversals.
A shift in momentum is considered more significant if the moving average moves faster than the slow moving average. A sell signal is triggered and confirmed when the short EMA exceeds the double moving average and the long E MA a slow – moving – average.
This happens when the slow moving average moves faster than the fast moving average and the change of the MACD series is complete.
Crossover occurs when the slow moving average moves faster than the fast moving average and the change of the MACD series is complete. Reading the exponential movement – average crossing is able to use the two moving mean combinations and not just the average of both.
The name moving average is also called a running average or rolling average, and as you can see, the average can be calculated in different ways. The strategies for changing the process are created by placing a large number of moving averages on a graph as shown in the graph below, each of which has its own move – average.
A slow moving average is called a large moving average – average because it has a larger subset of the calculated average. Double exponential moving averages (DEMA) is an improvement over Exponential Moving Average (EMA), as it gives more weight to current data points. The name “exponential” in the moving mean refers to the fact that the term “moving mean” has twice as much weight as the average periods preceding it (e.g. 0.5).