The Triangular Moving Average is a technical indicator similar to other moving averages. It is a simple MA that has been averaged again, creating an extra smooth moving average line. This indicator shows the average price of an asset over a specified number of data points.
In This Article
What is Triangular Moving Average?
How To Analyse Chart Using Triangular Moving Average
Category
Trend
Type
Lagging
The TMA is a moving average that gets averaged twice. Traders use this indicator in conjunction with other indicators to identify trends. It can be calculated using various input data like prices, volume, or other technical indicators.
In most cases, the TMA is applied to the price of a security. The purpose of this indicator is to double-smooth the price data that will produce a line that doesn’t react as quickly as a simple MA would.
In a volatile market, the TMA doesn’t react quickly. That is, it takes longer to change directions.
In technical analysis, the TMA is used similarly to other moving averages. Like other MAs, you can use TMA to identify trends. When the price moves above the TMA, it is considered a bullish trend. Conversely, when the price moves below the TMA, it is considered a bearish trend.
Traders can also watch out for TMAs lags. When the price moves back and forth, the TMA doesn’t react much. Thus, it lets you know that the trend hasn’t shifted much. It takes a more sustained move in the price to cause the Triangular Moving Average to change directions.