Trends/Moving averages

Triple exponential moving average

A moving average that uses three layers of exponential smoothing to remove most of the lag.

Moving averagesBest on 3M, 6M, 1YAlso called TEMA

Illustration of the triple exponential moving average shape. It is a sketch, not real price data.

What it shows

The TEMA, also by Patrick Mulloy, builds on the DEMA. It takes an EMA, an EMA of that, and an EMA of that again, and combines the three: three times the first, minus three times the second, plus the third.

It follows price very closely. It is quick, and it is also noisy.

How we find it

The same code that draws it on your chart follows these steps, with the same result every time.

Compute EMA1 of price over N bars.
Compute EMA2 of EMA1 and EMA3 of EMA2.
TEMA = 3 × EMA1 − 3 × EMA2 + EMA3.
Plot it.

Starting values: N 20. These are proposed and will be tuned on real price data before launch.

How to read it

The line hugs price.
It turns earlier than a DEMA.
It can cross price often.

Status labels you may see

Label	What it means
Above the average	The last close is above the TEMA.
Below the average	The last close is below the TEMA.
Crossing	Price crossed the TEMA in the last 3 bars.

What cancels it

Nothing cancels it.

What traders check next

How often price crosses it.
Whether it overshoots price at turns.
How it compares with the DEMA.

Limits

Very sensitive to noise.
Overshoots at turns.
Few traders use it.

Try it in forecastviz

Open any ticker and choose Moving averages → Triple exponential moving average in the left menu.
Switch between 3M, 6M, 1Y to see how the picture changes.
Compare with Double exponential moving average and Exponential moving average on the same chart.

Open on a ticker

Questions

Is it better than DEMA?

It has less lag and more noise.

Why three EMAs?

Each layer removes more lag.