The T3 Moving Average indicator was presented by Tim Tillson in "S&C Magazine" in January, 1998.
It is a triple smoothed combination of DEMA (Double Exponential Moving Average)
Advantages of T3:
Lower lagging, the line is much smoother, provides early entry signals, generates less false signals.
The indicator has three input parameters:
Volume factor (in percent) - DEMA influence coefficient (*)
Period - calculation period
Applied price
Calculation:
T3 = (1+Volume factor) * EMA4 - Volume factor * EMA5
where:
EMA5 - EMA(EMA4, Period)
EMA4 - EMA(GD2, Period)
GD2 = (1+Volume factor) * EMA2 - Volume factor * EMA3
EMA3 - EMA(EMA2, Period)
EMA2 - EMA(GD, Period)
GD = (1+Volume factor) * EMA0 - Volume factor * EMA1
EMA1 - EMA(EMA0, Period)
EMA0 - EMA(Applied price, Period)
_* "Volume factor" (default is 70%) determines the share of DEMA to use.
The factor ranges from 0, which makes it a simple EMA, to 100, which gives a full DEMA.
0% - T3 - is only a triple EMA ( EMA(EMA(EMA)) )
100% - T3 is a triple DEMA ( DEMA(DEMA(DEMA)) )_