Finance, Loans & Insurance
The Ultimate Guide To Use TMA
All those traders, who have just started intraday trading or share market trading and looking forward to understand about some technical strategies then this is the right post of internet as this post embraces the implementation of Triangular Moving Average, which help you in generating accurate intraday tips or share market tips. The Triangular Moving Average is the frequently used technical indicator that is also known as TMA. As other moving average technical indicators shows the average price over certain number of data points, this technical indicator also represents average price. However, the triangular Moving Average varies slightly by other moving averages as it smoothes twice. It is an indication that proves TMA is averaged twice. The triangular moving average is estimated with the use of several input data, like price of stocks, volume, or other technical indicators.
Simple definition of Triangular Moving Average is that it is simply a double-smoothed simple moving average. According to analysts the Triangular Moving Average is an average of data calculated over a period of time, when the middle portion of the data has more weight. It is used with high, low, open, or close price. It can also be applied with other indicators. The Triangular Moving Average is very important during volatile market as it smoothes the data series and allows you to generate accurate trading tips. In general, the triangular moving average is applied to the price of the stocks by technical analysts. On top of the chart, the moving average price bar is placed. When the TMA is applied to the volume or any other indicator then they are placed on top. The mathematical representation of calculating the Triangular Moving Average is shown below;
Let us assume that the triangular moving average is an average of an average, of the n number of prices, P
So initial step is to calculate the simple moving average, SMA, which is calculated as following;
Simple Moving Average = P1 + P2 + P3 + P4 + … + Pn / n
Once, you have calculated the SMA then you need to calculate the average of all the Simple Moving Average in order to get the value of triangular moving average.
TMA = (SMA1 + SMA2 + SMA3 + SMA4 + ….. SMAn) / n
Finally, you can represent the formula of triangular moving average as following;
MA = ( SMA ( SMAm, Nm ) ) / Nm
For those, who find difficulty in understanding mathematical notation, you can make use of trading software and charting packages to calculate entire calculations accurately in no time. However, if you rely on software then you need to ensure that not all the chart platforms embraces triangular moving average indicator. Therefore, you need to confirm that whether your chart is having triangular moving average indicator or not. You can open and search for it. If you do not find triangular moving average, then in that case, you can apply normal moving average. However, you also have the option of changing the settings by replacing normal to triangular moving average. You also need to note that there are various platforms that represent triangular moving average differently like “Moving Average Triangular” or “MovAvgTriangular”
There is other simple method to use triangular moving average, which is by applying simple moving average to your chart and then applying SMA for another time, using SMA as its input. If you are novice trader then usually, it is recommended to take help of best technical analysts, who are experienced in delivering accurate intraday calls or share market recommendations. You must ensure to investigate well before subscribing the services.