DECEMA-a
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This indicator is designed to provide traders with a sophisticated smoothing mechanism for market data. Instead of relying on a single moving average—which can often be too "noisy" or lag significantly behind current price action—this tool employs a multi-layered mathematical approach to filter out market fluctuations and highlight underlying trends.
How the Logic Works
1. The Layered Smoothing Process The core logic functions by taking the standard market price (the closing price) and passing it through a series of consecutive smoothing cycles. Think of this like a physical filter: each layer captures a different level of data, progressively removing smaller "wiggles" in the price while retaining the broader direction of the move.
- Initial Base: The script starts by calculating an Exponential Moving Average (EMA) based on a user-defined period (default is 15).
- Recursive Smoothing: It then takes that first average and calculates another moving average from it. This process is repeated multiple times, creating a chain of smoothed data points. By the time the script reaches the final calculation, the data has been refined through several distinct stages of processing.
2. The Weighted Calculation Once these different layers of smoothed data are established, the tool applies a specific weighted formula to combine them into a single final value (the "DECEMA" calculation).
Rather than treating all layers as equal, the logic assigns different multipliers to each layer. This specific weighting is designed to balance the sensitivity of the indicator:
- Some layers are given higher weights to emphasize certain smoothed trends.
- Other layers are subtracted or weighted differently to neutralize "fake-outs" and ensure the final line remains fluid but responsive.
Summary for Traders
The end result is a singular, highly refined trend line displayed in a separate window. Because this script processes the data through multiple iterations of smoothing and specific mathematical weighting, it aims to provide a much "cleaner" view of market momentum than a standard moving average could offer on its own. It helps traders identify the primary direction of the market by stripping away the temporary noise of price volatility.
/*-----------------------------+
| |
| Shared by www.Aptrafx.com |
| |
+------------------------------*/
//Version: 1
//Time: December 03, 2006
//+------------------------------------------------------------------+
//| DECEMA |
//| DECEMA.mq4 |
//| Developed by Coders Guru |
//| http://www.xpworx.com |
//+------------------------------------------------------------------+
#property link "http://www.xpworx.com"
#property indicator_separate_window
#property indicator_buffers 2
#property indicator_color1 Red
#property indicator_color2 Red
extern int MA_Period = 15;
extern int MA_Price = PRICE_CLOSE;
double CalcBuffer[];
double LastBuffer[];
double Buffer1[];
double Buffer2[];
double Buffer3[];
double Buffer4[];
double Buffer5[];
int init()
{
IndicatorBuffers(7);
SetIndexStyle(0,DRAW_LINE, STYLE_SOLID,2);
SetIndexStyle(1,DRAW_LINE, STYLE_SOLID,2);
SetIndexBuffer(0,CalcBuffer);
SetIndexBuffer(1,LastBuffer);
SetIndexBuffer(2,Buffer1);
SetIndexBuffer(3,Buffer2);
SetIndexBuffer(4,Buffer3);
SetIndexBuffer(5,Buffer4);
SetIndexBuffer(6,Buffer5);
SetIndexLabel(0,"CalcBuffer");
SetIndexLabel(1,"LastBuffer");
return(0);
}
int deinit()
{
return(0);
}
void start()
{
int limit;
int counted_bars=IndicatorCounted();
if(counted_bars<0) return(-1);
limit=Bars-counted_bars-1;
for(int shift=0; shift<limit; shift++)
Buffer1[shift] = iMA(NULL,0,MA_Period,0,MODE_EMA,MA_Price,shift);
for(shift=0; shift<limit; shift++)
Buffer2[shift] = iMAOnArray(Buffer1,0,MA_Period,0,MODE_EMA,shift);
for(shift=0; shift<limit; shift++)
Buffer3[shift] = iMAOnArray(Buffer2,0,MA_Period,0,MODE_EMA,shift);
for(shift=0; shift<limit; shift++)
Buffer4[shift] = iMAOnArray(Buffer3,0,MA_Period,0,MODE_EMA,shift);
for(shift=0; shift<limit; shift++)
Buffer5[shift] = iMAOnArray(Buffer4,0,MA_Period,0,MODE_EMA,shift);
for(shift=0; shift<limit; shift++)
LastBuffer[shift] = iMAOnArray(Buffer5,0,MA_Period,0,MODE_EMA,shift);
//DECEMA:= (10*EMA1)-(45*EMA2)+(120*EMA3)-(210*EMA4)+(252*EMA5)-(210*EMA6)+(120*EMA7)-(45*EMA8)+(10*EMA9)-EMA10;
for(shift=0; shift<limit; shift++)
CalcBuffer[shift] = (10*Buffer1[shift])-(45*Buffer2[shift])+(120*Buffer3[shift])-(210*Buffer4[shift])+(252*Buffer5[shift])-(210*LastBuffer[shift]);
return(0);
}
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