Kaufman's Adaptive Moving Average, KAMA,  is an adaptive calculation that uses the noise level of the market to determine the length of the trend required to calculate the average.  The more noise in the market, the slower the trend used to calculate the average.

 

On page 731 of Perry Kaufman's New Trading Systems and Methods, 4th edition, he describes how his adaptive trend calculations work, and his ideas on how they can be applied to trading ideas.

 

Parameter:

Description:

nBarsLen

Number of price bars over which to calculate the Kaufman averages.

 

Setup Example (Click on Images to enlarge):

 

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Kaufman Adaptive High Dialog Settings

 

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Kaufman Adaptive Low Dialog Settings

 

 

Chart Example (Click on image to enlarge):

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Kaufman Adaptive High-Low Range on Euro Currency

 

 


 

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