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<p><br>In stock trading, the triangular moving average (TMA) is a technical indicator that is similar to other moving averages. The TMA shows the average (or mean) price of an asset over a specified number of data points—usually a number of price bars. However, it differs in that it is double-smoothed, which also means averaged twice.</p>
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<p><br>A triangular moving average can be calculated using various input data, such as prices, volume, or other technical indicators. Triangle moving averages are most often applied to the price of an asset. The moving average overlays the price bars on a chart. It can also overlay the volume indicator if being applied to volume or any other indicator chosen by the trader.</p>
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<p id="isPasted">The triangular moving average (TMA) is an average of an average, of the last N prices (P).</p><p>First, calculate the simple moving average (SMA):</p><p> SMA = (P1 + P2 + P3 + P4 + ... + PN) / N</p><p>Then, take the average of all the SMA values to get TMA values.</p><p> TMA = (SMA1 + SMA2 + SMA3 + SMA4 + ... SMAN) / N</p><p>The TMA can also be expressed as: TMA = SUM (SMA values) / N</p><p>Luckily, you don't need to calculate anything; trading software and charting packages crunch all the numbers …</p>
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<p id="isPasted">The purpose of the triangular moving average is to double-smooth the price data, which will produce a line on your chart that doesn't react as quickly as an SMA would. It can be advantageous or problematic, depending on what you are using the TMA for. </p><p>The TMA won't react quickly in volatile market conditions, meaning that it will take longer for your TMA line to change direction. If you are using the TMA as a trade signal, then the TMA may react too slowly.</p><p>The TMA's lags can be a benefit though. If the price moves back and forth (range), …</p>
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