The TEMA or Triple Exponential Moving Average is a technical indicator used in financial markets to smooth price data and reduce lag by applying multiple layers of exponential moving averages (EMAs). It is designed to react faster to recent price changes than a standard moving average.

Syntax:

TEMA[N](price)

This function calculates the TEMA over the last N periods for a given price.

Calculation:

• MA1: Exponential moving average of the price over N periods.
• MA2: Exponential moving average of MA1 over N periods.
• MA3: Exponential moving average of MA2 over N periods.
• TEMA: Calculated as 3 * (MA1 - MA2) + MA3.

Example:

mm = TEMA[20](close)
slope = momentum[10](mm - mm[1])
RETURN slope

In this example, the TEMA is calculated over the last 20 periods of the close price. Then, the momentum of the TEMA is calculated over the last 10 periods, and this value is returned.

Interpretation:

The TEMA indicator is particularly useful for identifying trends in fast-moving markets. It is smoother and responds faster than a simple moving average, making it a valuable tool for traders who need to make quick decisions based on the latest market data. The TEMA can be combined with other indicators like the MACD or stochastic oscillator to enhance trading strategies.