The Error Correcting Exponential Moving Average
was created by John Ehlers
and Ric Way (Stocks & Commodities
V. 28:11 (30-35)) and this is an excellent moving average that accurately identifies the trend and sticks with the price during trends or choppy periods pretty well. It looks back to find the best gain setting for each day that returns the smallest difference between the current price and the ema
based on the gain setting and uses that day's info in it's total calculations and if there is a zero gain for the day then it is just a classic ema
. I have included strong buy and sell signals in addition to normal ones so lighter colors are normal and darker colors are strong. Buy when the line turns green and sell when it turns red.
Let me know if there are any other indicators you would like to see me publish!