EMMA indicator: an excellent replacement for the standard ZigZag
EMMA indicator (Extremums Market Moving Average) is an alternative to the standard ZigZag indicator. The work of the indicator is based on the bends of the moving average in order to determine the zones of search for local minimums and maximums. According to the author, the EMMA indicator does not have the disadvantages that occur when finding local extrema with the moving average, the indicator values do not overdraw
EMMA indicator for finding local extrema can be used in two modes:
- by the values of Close
- by High/Low values
Curves moving average are filtered using the percentage deviation from the inflection point, the direction of the MA line.
By default, the EMA indicator uses the SMA 18 applied to Close prices. The search for lows and highs is performed in Close mode, the deviation is 0.1%.
EMA indicator settings
- EMMA_Deviation_in_Percent - moving average bend filter, deviation in %.
- EMMA_Mode - selection of operating mode. 0 - by Close values, 1 - by High/Low values
- MA_Period - period of the moving average.
- MA_Method - type of moving average: 0 - simple moving average, 1 - exponential, 2 - smoothed, 3 - linear-weighted.
- MA_Applied_Price - method of calculation of the moving average: 0 - by Close price, 1 - by Open price, 2 - by High price, 3 - by Low price, 4 - by (high+low)/2, 5 - by (high+low+close)/3, by (high+low+close+close).
Additionally, the EMMA indicator can apply to the price chart:
- "Traffic Light."
- Fibonacci levels
- Fibonacci Fan
- Linear regression channels
- Standard deviation channel
In order to enable them in the indicator settings, you should set the required instrument to true.
According to experts of ForTrader.org magazine, using a moving average in calculations gives a disadvantage of all trend indicators - lag. In this regard it makes sense to use EMMA indicator to find reference points when drawing channels, TA figures, resistance and support levels.
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