Variable-Interval Moving Averages by R.G. Boomers
Time is the most difficult variable to capture in an indicator. Here’s a way to have a responsive, adjustable-length moving average without a lot of high-level math.
Simple moving averages are, perhaps, the best-known and utilized tool of technical analysis. Yet they do have limitations. One such limitation becomes painfully apparent when you try to choose an interval for the moving average. After all, different intervals have different strengths; a long interval for the moving average is great for smoothing random fluctuations, while a short interval improves early detection of turning points.
Unfortunately, these two design considerations are incompatible. Wouldn’t it be great if you could use a long moving average when that works best, a short moving average when that works best, and all the moving averages in between when they work best? Could a moving average that changes with market conditions be possible?