Triple Exponential Moving Average (TEMA)

The triple exponential moving average draws one line through price that sits closer to price than an EMA or a DEMA of the same length. It chains three EMAs together and combines them so that most of the delay an ordinary average carries cancels out. The line turns very soon after price does.

TEMA is not an EMA applied three times, which would be much slower. It does not confirm trend strength or predict future prices, and its lag correction makes it overshoot price at sharp turns, more than DEMA does.

• Price above or below the line. Price holding above TEMA is read as context for an uptrend, below it for a downtrend. The line is close to price, so it is crossed often.
• The slope. TEMA's direction changes quickly, so a turn in the line is an early but noisy sign that a move is ending.
• TEMA against a slower average. Pairing it with a plain EMA or SMA gives a fast and a slow line; the fast one crossing the slow one marks a change in short-term direction.
• Period length. Shorter reacts sooner and overshoots more; longer is smoother and later.

These are ways to read the line, not entry signals on their own.

Adjust the period and price source in the indicator settings.

TEMA takes an EMA of price, an EMA of that, and an EMA of the second, all with the same length, then combines them with fixed coefficients:

alpha = 2 / (length + 1)          (0.2 at the default 9)
e1    = EMA(price, 9)
e2    = EMA(e1, 9)
e3    = EMA(e2, 9)
TEMA  = 3 * e1 - 3 * e2 + e3

The 3, minus 3 and plus 1 are not tuning values. They are the combination that cancels the lag terms of the three chained averages, which is why they cannot be adjusted. DEMA makes the same correction with two averages; TEMA takes it one step further.

Each EMA is seeded from the simple average of its first n values, and each needs n values of the one before it. With the default length the three averages start on bars 9, 17 and 25, so TEMA first appears on bar 25.

• It overshoots. The stronger lag correction pushes the line past price at sharp turns, further than DEMA does.
• Sideways markets produce frequent crossings. Because the line follows price so closely, choppy conditions generate many crossings.
• It takes a long time to start. Three chained averages need roughly three times the length in bars before the first value appears.
• It depends on timeframe, period and source. The same indicator gives a different line on 15m than on 1D, or on close against hl2.
• It is not a strategy. On its own it carries no risk management, sizing or exit.

• Double Exponential Moving Average (DEMA). An EMA with an estimate of its own lag added back, so it turns sooner than an EMA of the same length, at the cost of overshooting at turns.
• Exponential Moving Average (EMA). An average that weights recent bars more heavily, so it turns sooner than a simple average.
• Hull Moving Average (HMA). A moving average that corrects for lag and then smooths the result, so it turns faster than an EMA of the same length while staying smooth.