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| Build custom indicators to address specific styles and personal goals. Modern software features prepackaged calculations that examine different aspects of market behavior. Learn how these respond to changing conditions and deconstruct their math. Adjust settings and look at the change in output. Over time, natural variations will add considerable horsepower to trading performance. Many indicators apply smoothing averages to their raw calculations. These slow down choppy output and filter individual data to emit fewer false signals. Learn to apply these moving averages to remove inherent bias from classic formula. Exponential MAs provide the most useful applications. These place greater weight on more recent input and filter the double count tendency of simple MAs. Experiment with alternative MA calculations when indicators require a smoother appearance. The varied output may improve a particular tactic or method. Use this custom technique to speed up, slow down or filter out certain levels of data.
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