Tilson T3 Moving Average
A smooth, low-lag moving average that uses multiple exponential smoothing.
Usage
Use for trend following in noisy markets. T3 offers a superior balance between lag reduction and smoothness compared to DEMA or TEMA.
Background
Developed by Tim Tilson in 1998, the T3 moving average uses a 'v-factor' (volume factor) to control how much the indicator reacts to price changes. It is essentially a sextuple EMA smoothing process that provides a very smooth curve with remarkably little lag. — Technical Analysis of Stocks & Commodities
Parameters
timeperiod(default: 5): Smoothing periodv_factor(default: 0.7): Volume factor (0.0 to 1.0)
Formula
\[
e1 = EMA(Price, n) \\ e2 = EMA(e1, n) \\ \dots \\ e6 = EMA(e5, n) \\ T3 = c1 \times e6 + c2 \times e5 + c3 \times e4 + c4 \times e3
\]