The KAMA Indicator Calculation | How and why it works | Kaufman Adaptive Moving Average

This episode looks at how and why the calculation of the Kaufman Adaptive Moving Average KAMA indicator works. This helps with an understanding of the advantages that adaptive indicators like this can have over standard static indicators.

Because the formula uses the Kaufman Efficiency Ratio to adjust its parameters this means it can help to negate the effects of noise on trend following systems. The Kaufman adaptive moving average does this using an ingenious technique to speed up or slow down the moving average periods, based on what's required to avoid the effects of noise.

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This is Episode 100 in the Darwinex 'Algo Trading for a Living' Playlist, and Episode 20 of the 'Market Noise' mini-series.

Video Contents:
00:00 Introduction
00:51 Why Darwinex?
01:46 The KAMA Indicator Calculation
04:16 The Smoothing Constant
04:58 The Efficiency Ratio
07:18 Behaviour of KAMA
07:37 Adjusting the Kaufman Adaptive Moving Average
10:03 Noise Indicator Package
10:48 Summary

Content Disclaimer: Past performance is not a reliable indicator of future results. The contents of this video (and all other videos by the presenter) are for educational purposes only and are not to be construed as financial and/or investment advice.

Risk disclosure: https://www.darwinex.com/legal/risk-disclaimer

Видео The KAMA Indicator Calculation | How and why it works | Kaufman Adaptive Moving Average канала Darwinex