A variation on the traditional moving average in an attempt to reduce lag.
Overview
The T3 Moving Average was described by Tim Tillson in the January, 1998 issue of ‘Technical Analysis of Stocks & Commodities’ article “Smoothing Techniques for More Accurate Signals”. The T3 is a smoothed out version of traditional moving averages, reducing the lag. However, because it is sensitive and thus can “overshoot”.
20-period T3 Moving Average in the GBP/USD 4H Chart on 3/22/2011
Source: VT Trader
Interpretation
Since the T3 is a type of moving average and can use interpretations for the moving average such as crossovers of price and the MA.
Moving average crossover systems create signal when MAs of varying periods cross.
Also, much like the traditional MAs, we can attach it indicators as well and use similar interpretations as used for price.
Implementation
The Price (ie close), Periods, MA Type, and Volume Factor inputs are the parameters that should be customizable for the T3 Moving Average indicator.
