# The speed and acceleration of the moving average are two important characteristics when trading the market

Increasing the efficiency of work in the market when used in trading strategies moving averages indicators is possible if we know two other characteristics at this point in time - the rate of change and the acceleration of change of the moving average.

## Speed and acceleration of the moving average

Figure 1 shows the gold price quotes (Daily), two moving averages: RAMA(40) (bold black line), RAMA(11) (bold red line).

Details about the RAMA indicator, as well as the algorithm of its implementation can be found in the article "Improved modification of the moving average - indicator RAMA vs SMA".

Figure 1 shows that the rate of change of the line of moving average RAMA should reflect the magnitude of its slope at a given time, and the acceleration of the indicator should reflect the change in the magnitude of this slope at a given time. That is, you need to build two more indicators - the speed and acceleration of moving average, in this case we will significantly increase the information value of charts.

Now there are many publications about using digital filters as -indicators. With their application it is possible to get an indicator with the necessary reaction to the changes of the quote signal. In this example it is necessary for the digital filter to output the speed line or the moving average acceleration line.

## Speed and acceleration of the moving average RAMA(40)

Figure 2 shows the gold price quotes (Daily), the moving average RAMA(40) (bold black line), the oscillator RAOS(40) (magenta lines), which displays the rate of change of RAMA(40), the oscillator RAOSQ(40) (black lines), which displays the change in acceleration of RAMA(40).

From Figure 2 shows that if the line indicator RAOS above the line indicator RAMA, the RAMA moves up, if the line indicator RAOS below the RAMA indicator, the RAMA moves down.

In addition, it can be seen that if the downward movement of the RAMA slows down, the RAOSQ indicator moves to a position "above" the moving average line RAMA, and vice versa, if the upward movement of the line RAMA slows down, the RAOSQ indicator moves to a position "below" RAMA.

At the end of the chart you can see that the indicator RAOSQ (black lines) moves to a position "below" the moving average RAMA, that is, the upward movement RAMA is slowing. The acceleration is negative, that is, the indicator RAOSQ has moved to a position "below" the moving average RAMA. Applied to the example in Figure 2, this is a proactive divergence signal of a possible reversal or technical correction.

## Speed and acceleration of the moving average RAMA(11)

Figure 3 shows the gold price quotes (Daily), the moving average RAMA(11) (bold red line), the oscillator RAOS(11) (blue lines), which displays the rate of change of the indicator RAMA(11), the oscillator RAOSQ(11) (yellow and red lines), which displays the rate of change of RAMA(11).

Figures 2 and 3 show that the combined use of the indicators allows you to work in a trend market, as well as in the flat and on the reversals.

## Combining charts

Figure 5 shows gold rate quotes (Daily, end date March 23, 2018).

Figure 6 shows the completion of Figure 5 on a larger scale.

You can read more about RAOS and RAOSQ indicators in the articles:

## Conclusions

The use of two moving averages is a representation of the traded instrument quotations in the form of two dynamics: fast and slow. Supplementing each dynamic (that is, each moving average) with two more characteristics: speed (RAOS) and acceleration (RAOSQ), allows you to unambiguously follow the market in the trend, flat and on the U-turns.