Triple Exponential Moving Average
TEMA reduces the lag of traditional EMAs.
Usage
Use to reduce the lag of a standard EMA by approximately two thirds. Drop-in replacement for EMA in trend-following systems where responsiveness is more important than smoothness.
Background
Patrick Mulloy introduced Triple EMA in Technical Analysis of Stocks and Commodities (1994) as a practical lag-reduction technique. TEMA = 3EMA - 3EMA(EMA) + EMA(EMA(EMA)), subtracting out two orders of the EMA lag while preserving most of the noise reduction.
Parameters
period(default: 14): Smoothing period
Formula
\[
TEMA = (3 \times EMA_1) - (3 \times EMA_2) + EMA_3
\]