This indicator is calculated the following way:
LRMA[bar] = 3.0 * LWMA(Price[bar]) - 2.0 * SMA(Price[bar])
where:
- LWMA() - linearly weighted smoothing;
- SMA() - simple smoothing;
- PRICE[] - price series value;
- bar - current bar index.
This indicator clearly shows market trends dividing a price chart into two sectors. If a price is above the indicator line, the trend is going upwards. If a price is below the indicator line, the trend is going downwards.
The indicator uses the classes from the SmoothAlgorithms.mqh and IndicatorsAlgorithms.mqh libraries (they must be placed to the terminal_data_folder\MQL5\Include). The use of the classes was thoroughly descirbed in the article "Averaging Price Series for Intermediate Calculations Without Using Additional Buffers".
