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Adaptive Moving Average (AMA) in the Trade Rule Block

The Adaptive Moving Average adjusts its speed to the market: fast in trends, slow in sideways markets.

Purpose of the AMA

The Adaptive Moving Average (AMA), developed by Perry Kaufman, changes its speed depending on how efficiently price is moving. In a clear trend it follows price closely; in a choppy market it flattens out to filter noise. This makes it useful as a trend line that produces fewer false signals than a regular moving average.

How It Works

When you select Adaptive Moving Average (AMA) in the Trade Rule block, you can configure it with the following settings:

AMA Period of AMA

  • The number of candles used to measure market efficiency (standard: 9).

Fast EMA Period of AMA

  • The fastest speed the AMA can reach in a strong trend (standard: 2).

Slow EMA Period of AMA

  • The slowest speed the AMA can reach in a sideways market (standard: 30).

Shift of AMA (Advanced Option)

  • Moves the line forward or backward on the chart by a set number of candles.

Applied Price of AMA (What the AMA is calculated from)

  • Close Price: Uses the candle's closing price.

  • Open Price: Uses the candle's opening price.

  • High Price: Uses the highest price in the candle.

  • Low Price: Uses the lowest price in the candle.

  • Median Price: (High + Low) ÷ 2

  • Typical Price: (High + Low + Close) ÷ 3

  • Weighted Price: (High + Low + Open + Close) ÷ 4

Time Frame of AMA

  • Sets the chart time frame for the AMA calculation.

  • Can be replaced with a variable or input for quick testing and optimization.

Candle ID of AMA

  • Defines which candle the calculation starts from.

  • 0: Current candle (still forming).

  • 1: Most recently closed candle.

  • Higher IDs refer to older candles.

Adjust of AMA (Modify the Result)

  • Apply an adjustment to the calculated value by adding, subtracting, multiplying, or dividing by a number.

Example

If you set:

  • AMA Period: 9

  • Fast EMA Period: 2

  • Slow EMA Period: 30

  • Applied Price: Close

  • Candle ID: 1

You get the AMA value of the most recently closed candle, calculated from closing prices.

Adaptive Moving Average (AMA) settings in the Profectus Trade Rule block

Use Cases

  • Use price above the AMA as a bullish trend filter, and below as bearish.

  • Use the AMA as a dynamic support or resistance line.

  • Replace a regular moving average when you want fewer false signals in sideways markets.

  • Can also be used as a Custom level stop-loss or take-profit, as a pending-order price, and as the Modify SL/TP reference price.

⚠ Tip: Because the AMA flattens in choppy markets, a flat AMA is itself a signal that the market has no clear trend.

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