Pivot Moving Average (PMA)

Overview

The Pivot Moving Average revolutionizes traditional moving average concepts by using market structure itself to determine averaging periods. Rather than calculating over a fixed number of bars, PMA identifies pivot points - significant highs and lows where price reversed direction - and calculates the average price between these structural points. This approach creates a moving average that naturally aligns with support and resistance levels, as it's based on the same price points that traders use to identify market structure.

The calculation process involves detecting pivot highs and lows using a specified number of bars to the left and right for confirmation. When a new pivot is identified, PMA calculates the average of all prices between the current pivot and the previous one. This creates segments of different lengths based on market volatility and structure - during trending markets with fewer pivots, the average covers more bars, while in choppy markets with frequent pivots, the segments are shorter. This adaptive nature makes PMA particularly effective at filtering noise while remaining responsive to significant market changes.

Interpretation & Trading Signals

Example Usage

Code examples will be available once the Rust implementation is complete.