Flexibility and responsiveness

Posted by Scriptaty | 5:25 AM

The adaptive moving average’s strength is its ability to respond to changing market conditions, which is a problem for studies that use fixed look-back periods.

Using a fixed look-back period is like trying to fit the market to a template. Because the market is always changing, static approaches are likely to have limited success. Using adaptive studies is a potential way to improve results. Also, the AMA might be appropriate for smoothing other indicators.

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