Kaufman's Adaptive Moving Average
Trend, KAMA
- What it shows
A moving average that speeds up in trends and slows down in noise.
- How it is built
It measures how efficient the recent move was, the net change against the sum of all changes, and uses that to choose between a fast and a slow smoothing speed.
Default: Efficiency length 10, fast 2, slow 30, source close.
- How traders read it
- Flat when the market is choppy, so it gives fewer false crosses.
- Follows the trend when price moves cleanly.
- The slope and price against the line are the usual reads.
- History
Presented by Perry Kaufman in his book Smarter Trading (1995).
Perry Kaufman, 1995
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