Triple Exponential Moving Average (TEMA)

Overview

The Triple Exponential Moving Average represents a breakthrough in moving average technology, addressing the perpetual challenge of lag that plagues traditional indicators. Published in Technical Analysis of Stocks & Commodities magazine as "Smoothing Data with Faster Moving Averages," Patrick Mulloy's innovation doesn't simply apply exponential smoothing three times. Instead, it uses a sophisticated formula that combines three EMAs in a way that cancels out much of the lag: TEMA = (3 × EMA1) - (3 × EMA2) + EMA3, where each EMA is calculated from the previous one using the same period.

This unique mathematical approach creates an indicator that reacts significantly faster to price changes than single or double exponential moving averages while maintaining the smoothing benefits traders rely on. The TEMA's responsiveness makes it particularly valuable in fast-moving markets where traditional moving averages would lag too far behind price action. Despite its name suggesting triple smoothing, TEMA actually achieves less lag than a single EMA through its clever combination of the three exponential calculations, making it one of the most responsive trend-following indicators available.

Interpretation & Trading Signals

Example Usage

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