# TEMA Indicator for MT4

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## Introduction to the TEMA Indicator

Most moving average lines tend to have a weakness which is lag. This often causes traders to make trade decisions too late.

The Triple Exponential Moving Average (TEMA) Indicator was developed by Patrick Mulloy during the mid-1990s to create a moving average line which minimizes lag as much as possible.

## What is the TEMA Indicator?

The TEMA Indicator is a modified moving average indicator which is derived from the Exponential Moving Average (EMA).

It plots a moving average line which is characteristically very responsive to price movements and tends to follow price action very closely.

## How the TEMA Indicator Works?

The TEMA Indicator uses a formula which adds another layer of weight on the basic EMA line. In fact, it can also be computed using the Double Exponential Moving Average (DEMA). The formula below shows how the TEMA line is computed.

TEMA = (3 x EMA1) – (3 x EMA2) + (EMA3)

Where:

EMA1 = EMA of price

EMA2 = EMA of EMA1

EMA3 = EMA of EMA2

Given this formula, we could say that the TEMA basically has three layers of EMAs, which is why it is called the Triple Exponential Moving Average. This formula places more emphasis on recent price movements which is what makes the TEMA line more responsive.

## How to use the TEMA Indicator for MT4

The TEMA Indicator has one variable which modifies its sensitivity to price movements.

The “EMA_period” variable changes the number of bars used to compute for the TEMA line. The lower the variable input, the more responsive the line becomes.

This indicator may be used as a regular moving average is used. It can be used to detect trend direction based on where price action generally is in relation to the TEMA line or the slope of the TEMA line.

It can also be used as a dynamic support and resistance level where price can pullback during trending markets.

However, given the responsive nature of this moving average line, the TEMA is best suited as a component in a moving average crossover entry. It is also best to use these crossovers merely as an entry trigger or signal which is in confluence with a longer-term trade setup.

In the examples below, we will be pairing the TEMA line with the 21-period Simple Moving Average (SMA).

When to Enter?

Open a buy order as soon as the TEMA line crosses above a slower moving average line. Set the stop loss on the support below the entry candle.

When to Exit?

Set a take profit target based on the opposing resistance level.

When to Enter?

Open a sell order as soon as the TEMA line crosses below a slower moving average line. Set the stop loss on the resistance above the entry candle.

When to Exit?

Set a take profit target based on the opposing support level.

## Conclusion

As with most moving average crossover strategies, not all crossovers would result in a strong run or an actual trend reversal. This is why it is best to use such crossovers only in confluence with a bigger picture trade setup which is usually found on the higher timeframes.

It is also best to practice using this moving average first and tweak its sensitivity as you find fit for your strategy before using it in a live trade account.

TEMA Indicator for MT4 is a Metatrader 4 (MT4) indicator and the essence of this technical indicator is to transform the accumulated history data.

TEMA Indicator for MT4 provides for an opportunity to detect various peculiarities and patterns in price dynamics which are invisible to the naked eye.

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#### How to install TEMA Indicator for MT4.mq4?

• Copy TEMA Indicator for MT4.mq4 to your Metatrader Directory / experts / indicators /
• Select Chart and Timeframe where you want to test your MT4 indicators
• Right click on TEMA Indicator for MT4.mq4
• Attach to a chart
• Modify settings or press ok
• Indicator TEMA Indicator for MT4.mq4 is available on your Chart

#### How to remove TEMA Indicator for MT4.mq4 from your Metatrader Chart?

• Select the Chart where is the Indicator running in your Metatrader 4 Client
• Right click into the Chart
• “Indicators list”
• Select the Indicator and delete