The T3 Indicator is an advanced moving average developed by Tim Tillson that reduces lag while maintaining a smooth curve that filters market noise. Unlike traditional moving averages, the T3 combines multiple exponential moving averages (EMAs) to achieve superior responsiveness to genuine price movement.
Calculation Method
The T3 is calculated using a cascade of six exponential moving averages with a weighting system based on the volume factor. The formula uses specific coefficients to combine these EMAs:
- First, six sequential EMAs are calculated where each EMA takes the output of the previous EMA as input
- The T3 formula then combines these EMAs with coefficients derived from the volume factor:
T3 = c1*EMA6 + c2*EMA5 + c3*EMA4 + c4*EMA3
Where:- c1 = -factor³
- c2 = 3factor² + 3factor³
- c3 = -6factor² - 3factor - 3*factor³
- c4 = 1 + 3factor + factor³ + 3factor²
Input Parameters
- T3_Length: Period length for the EMAs (default: 12)
- T3_Factor: Volume factor that controls the smoothness vs. responsiveness (default: 0.7)
- Higher values (closer to 1) create smoother lines with more lag
- Lower values (closer to 0) create more responsive lines with less lag
Usage
The T3 Indicator can be used for:
- Trend identification (direction of the T3 line)
- Trading signals (price crossing the T3 line)
- Support and resistance levels
- Filtering short-term market noise
Installation
Place the file in your MetaTrader 5 indicators folder and attach it to any chart. Adjust the input parameters to suit your trading strategy and timeframe.
