OPEN-SOURCE SCRIPT
Corrected QWMA (Quadratic Weighted Moving Average) [Loxx]
Corrected QWMA (Quadratic Weighted Moving Average) [Loxx] is the "corrected" version of QWMA. There are other attempts on TradingView to create the QWMA, this is the correct version with weighting applied to the lookback period.
"Correcting" is a process where the value of the average is checked for the significance (how big is it) of change. For that, a standard deviation of a change is used and if the change is "not significant enough", then the change is ignored. Because of this, the average starts to have that "step like" value, but in any case, it should not be mixed with the step average type. The corrected average is different.
The correction period can be used to have different types of calculations:
Color combinations:
Included:
"Correcting" is a process where the value of the average is checked for the significance (how big is it) of change. For that, a standard deviation of a change is used and if the change is "not significant enough", then the change is ignored. Because of this, the average starts to have that "step like" value, but in any case, it should not be mixed with the step average type. The corrected average is different.
The correction period can be used to have different types of calculations:
- If the "correction" period is set to < 0, then there is no correction made (in that case the value is exactly the same as original qwma)
- If the "correction" period is set to 0, then the "correction" period is the same as qma period
- If it is set to any other value, that period is used
Color combinations:
- Middle: color (and alerts) on slope change
- Levels: (and alerts) on outer levels cross
- QWMA: (and alerts) on middle level cross
Included:
- Bar coloring
- Signals
- Alerts
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Open-source script
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in publication is governed by House rules. You can favorite it to use it on a chart.
Disclaimer
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