Introduction to TEMA Indicator

Moving average lines are prone to have weakness that is lag. This can lead traders to make trade decision too late.

Patrick Mulloy developed the Triple Exponential Moving Average Indicator (TEMA) in the mid-1990s to create an indicator that minimizes lag.

What's the TEMA Indicator?

TEMA Indicator (Modified Moving Average Indicator) is derived from Exponential Moving Average.

It plots a moving median line that is very responsive to price movements. This tends to closely follow price action.

How does the TEMA Indicator Work?

TEMA Indicator adds an additional layer to the basic EMA line using a formula. It can be calculated using the Double Exponential Moving Average. Below is the formula that calculates the TEMA line.

TEMA = (3 x EMA1) – (3 x EMA2) + (3 x EMA3)

Where:

EMA1 = EMA price

EMA2 = EMA1

EMA3 = EMA2

This formula allows us to say that the TEMA has three layers of EMAs. It is also why it is called Triple Exponential Moving average. This formula puts more emphasis on price movements in recent times, which makes the TEMA line responsive.

How to Use the TEMA Indicator For MT4

One variable modifies the TEMA Indicator's sensitivity to price changes.

Variable "EMA_period", which changes the number bars used for computing the TEMA line, modifies the variable. The more responsive the line is, the lower the variable input.

This indicator can be used as a moving average. This indicator can be used to determine trend direction by analyzing where price action is relative to the TEMA lines or its slope.

It can also serve as a support level and resistance level for trending markets, where prices can pull back.

The responsive nature of the moving average line makes the TEMA a good component for a moving average crossover entry. These crossovers should not be used as an entry trigger, signal, or combination with a longer-term trade setup.

The examples below show how we have paired the TEMA line and the 21-period Simple Moving average (SMA) in the following.

Trade Setup

How to Enter?

When the TEMA line crosses over a slower moving average, open a buy order. Place the stop loss at the support below the entry candle.

When do you want to exit?

You should set a profit target that is based on the resistance level.

Setup for Trades

How to Enter?

When the TEMA line crosses below a slower-moving average line, open a sell order. Set the stop loss at resistance higher than the entry candle.

When do you want to exit?

Establish a profit target that is based on the oppositional support level.

Conclusion

Like most moving average crossover strategies not all crossovers will result in strong runs or a trend reversal. It is important to only use these crossovers in conjunction with larger picture trade setups, which are usually found on longer timeframes.

You should also practice using the moving average and adjust its sensitivity to suit your strategy before you use it in live trade accounts.

Indicators - Download Instructions

TEMA Indicator for MT4 (Metatrader 4 or MT4) is a Metatrader 4- (MT4) indicator. Its purpose is to transform the accumulated historical data.

The TEMA Indicator for MT4 allows you to spot patterns and peculiarities in price dynamics that are not visible to the naked eye.

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How do I install the TEMA Indicator on MT4.mq4

• TEMA Indicator Download for MT4.mq4
• Copy the TEMA indicator for MT4.mq4 and add it to your Metatrader directory / experts/ indicators.
• Metatrader 4 Client can be restarted or started
• Choose Chart and Timeframe to test your MT4 indicator
• You can search "Custom Indicators" using your Navigator, mostly left in your Metatrader4 Client
• Right click on TEMA indicator for MT4.mq4
• Attach a chart
• Change settings or click ok
• Your Chart contains the TEMA Indicator for Market 4.mq4.

How do I remove the TEMA Indicator from MT4.mq4 in my Metatrader Chart?

• Select the Chart in which the Indicator is running in your Metatrader4 Client
• Right-click to open the Chart
• "Indicators list"
• Select the indicator and click delete

TEMA indicator for MT4 (Free download)

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