Description

• TEMA is a higher version of DEMA (Double Exponential Moving Average). Developed by Patrick Mulloy, it is a combination of single, double and triples exponential moving average
• It is more adaptive and leading than using a single EMA, as it is constructed to be more dynamic

Interpretation

• Similar to other averages, TEMA is also used for confirming trends and price direction
• The price line moving above TEMA indicates an uptrend suitable for Buy trades
• The price line moving below TEMA indicates an downtrend suitable for Sell trades
• It can be plotted with other indicators for crossovers giving effective signals

Default Parameters Used/Inputs

• Data line- Close line, High line, Open line, Low line or others
• Bars – number of bars for which TEMA has to be calculated

Returns/Output

A fast responsive and dynamic TEMA graph line

Formula

TEMA = (3 * EMA) - (3 * EMA of EMA) + EMA of EMA of EMA