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Arun,
Finally had some time to put together some information for you on
the indicator that you requested.
Important to remember that the TEMA and the DEMA were both developed
by Patrick Mulloy. They both use unique methods to determine their
final values. I believe the following information explains
everything.
DEMA and TEMA are unique smoothing indicators developed by Patrick
Mulloy. TEMA was originally introduced in the January 1994 issue
of Technical Analysis of Stocks & Commodities magazine. As Mr.
Mulloy explains in the article:
"Moving averages have a detrimental lag time that increases as the
moving average length increases. The solution is a modified version
of exponential smoothing with less lag time." TEMA is an acronym
that stands for Triple Exponential Moving Average. HOWEVER, the
name of this smoothing technique is a bit misleading in that it is
not simply a moving average of a moving average of a moving
average. It is a unique composite of a single exponential moving
average, a double exponential moving average, and a triple
exponential moving average that provides less lag than either of the
three components individually.
{Arun DTMA}
{Plots either a DEMA or TEMA}
Plot:= Input("Display [1] Dema[2] Tema",1,2,2);
Period:= Input("What Period",1,250,10);
EMA1:= Mov(C,Period,E);
EMA2:= Mov(EMA1,Period,E);
EMA3:= Mov(EMA2,Period,E);
Difference:= EMA1 - EMA2;
DMA:= EMA1 + Difference;
TMA:=(3*(EMA1-EMA2))+EMA3;
If(plot=2,TMA,DMA);{end}
Hope this helps,
Preston
--- In equismetastock@xxxxxxxxxxxxxxx, "arun103" <arun103@xxx> wrote:
>
> Hello everybody,
>
> The following formula is for plotting a 10-period tema moving
> average:
>
> (3*Mov(C,10,E)-(3*Mov(Mov(C,10,E),10,E))+(Mov(Mov(Mov
> (C,10,E),10,E),10,E)))
>
> How does one derive this formula?
>
> Looking at the derivation of a Zero Lag EMA, I have proceeded as
> follows but I don't get the above formula. I know I'm wrong
> somewhere.
>
> EMA1:=mov(C,10,E);
> EMA2:=mov(EMA1,10,E);
> EMA3:=mov(EMA2,10,E);
> Difference1:=EMA1-EMA2;
> Difference2:=EMA2-EMA3;
> Teema{Tema}:=EMA1+Difference1+Difference2;
>
> Please correct me.
>
> Thanks
>
> Arun
>
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