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  • Current AMA Prior AMA + SC X (Price - Prior AMA)

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    Current AMA

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    Current AMA

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    Current AMA

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    6 views1 page

    Current AMA Prior AMA + SC X (Price - Prior AMA)

    Uploaded by

    cryptocuenta
    Current AMA

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    Current AMA = Prior AMA + SC x (Price - Prior AMA)

    The settings recommended by Perry Kaufman: AMA (10, 2, 30).


    10 is the number of periods for the Efficiency Ratio (ER).
    2 is the number of periods for the fastest EMA constant.
    30 is the number of periods for the slowest EMA constant.

    Smoothing Constant (SC)


    The SC uses the smoothing factor [2/(1+N)] of the EMA in its formula.

    SC = [ER x (fastest SC - slowest SC) + slowest SC]2


    SC = [ER x (2 / (1+2) – 2 / (1+30)) + 2 / (1+30)]2
    The Faster SC is for shorter EMA (2-periods). 2 / (1+2)
    The Slower SC is for the longer EMA (30-periods). 2 / (1+30)
    Note that the “2” at the end is to square the equation.

    The Efficiency Ratio (ER)

    ER = Change/Volatility
    Number of periods x (user input)
    Change = ABS (Close - Close (10 periods ago))
    Volatility = Sum10 (ABS (Close - Prior Close))
    Volatility is the sum of the absolute value of the last 10 price changes (Close - Prior
    Close).
    ABS stands for Absolute Value.
    **Refer to the ER appendix for complete info and guideline.**

    Since we need an initial value to start the calculation, the first AMA is just a simple moving
    average.

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