Displaced Moving Average

Displaced Moving Average (DMA) display previous moving average (MA) on the current bar. The MA is also plotted as a signal line for the DMA. The user may change the input (close), method (SMA), period and displace length. This indicator’s definition is further expressed in the condensed code given in the calculation below.

How To Trade Using Displaced Moving Averages

Trading signals are generated when the DMA and the MA cross. If the DMA crosses above (upward movement) a buy signal is generated. Conversely, if the DMA crosses below (downward movement) a sell signal is given.

How To Access in MotiveWave

Go to the top menu, choose Study>Moving Averages>Displaced Moving Averages

or go to the top menu, choose Add Study, start typing in this study name until you see it appear in the list, click on the study name, click OK.

Important Disclaimer: The information provided on this page is strictly for informational purposes and is not to be construed as advice or solicitation to buy or sell any security. Please see our Risk Disclosure and Performance Disclaimer Statement.

Calculation

//input = price (user defined, default is midpoint price)
//method = user defined, default is SMA
//period = user defined, default = 13
//displace = user defined, default = 8
//index = current bar number

Plot1: MA = ma(method, index, period, input);
Plot2: DMA = ma(method, index+displace, period, input);
 //Check for signal events
buy = crossedAbove(DMA, MA);
sell = crossedBelow(DMA, MA);