About the Triple Exponential Moving Average Indicator
The Triple Exponential Moving Average indicator, commonly referred to as TEMA, is a sophisticated technical tool developed to address the inherent lag found in traditional moving averages.
Unlike a standard simple or exponential moving average, the TEMA uses a complex triple-smoothing process that keeps the indicator line much closer to the actual price action.
This responsiveness allows you to spot trend changes significantly earlier than you would with conventional trend-following tools.
For traders who prioritize speed and precision, this indicator is a game-changer.
It calculates a single EMA, then a second EMA of that result, and finally a third EMA of the second one.
By applying a specific formula to these three layers, it cancels out the delay normally associated with price smoothing.
The result is a non-repainting signal line that changes color to reflect market sentiment, helping you stay on the right side of the trend during volatile market sessions.
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Download the “Triple exponential moving average.mq4” indicator for MT4
Key Features
- An advanced triple-smoothing algorithm designed to minimize signal lag.
- Dynamic color-coded signal line for immediate trend identification.
- Fully adjustable period settings to accommodate scalping or swing trading styles.
- Smooths out market noise without sacrificing the speed of entry signals.
Indicator Chart
The following chart showcases the Triple Exponential Moving Average indicator in action.
The signal line transitions between blue and red as it tracks the price, providing a visual representation of the prevailing momentum.
In this example, the indicator successfully filters out minor fluctuations, staying blue during sustained uptrends and turning red when the bearish pressure begins to dominate.
Guide to Trade with Triple Exponential Moving Average
Trading with this tool is straightforward, but it is most effective when you align your entries with the broader market context.
Use the color changes as your primary trigger while managing risk around key structural levels.
Buy Rules
- Monitor the TEMA signal line until it changes color from red to blue.
- Ensure the price is currently trading above a recent support level or swing low.
- Open a buy position at the start of the next candle following the blue signal.
Sell Rules
- Wait for the TEMA signal line to transition from blue to red.
- Confirm that the bearish move is not occurring directly into a major demand zone.
- Execute a sell trade immediately after the indicator prints the red line.
Stop Loss
- For long positions, place your stop loss slightly below the most recent swing low.
- For short positions, set the stop loss a few pips above the most recent swing high.
Take Profit
- Close the trade when the indicator line changes to the opposite color.
- Alternatively, target a fixed reward-to-risk ratio of 2:1 or use a trailing stop.
Triple Exponential Moving Average + Best Forex Scalping Indicator MT4 Strategy
This scalping system uses the Triple Exponential Moving Average Indicator for MT4 in its trend-identification role and the Best Forex Scalping Indicator for MT4 as the trigger based on buy/sell
arrow signals.
The logic is simple: trade with the direction of the trend (blue TEMA line = up, red TEMA line = down) and wait for a precise arrow signal (blue arrow = buy, red arrow = sell) to pull the trigger.
This setup works best on M5 and M15 charts, where price movements are frequent, and is suited for traders who prefer quick entries and exits rather than holding positions for extended periods.
If you’re comfortable with making fast decisions and taking on short-term risk, this is a good fit.
How it Works
The Triple Exponential Moving Average (TEMA) is a smoothed moving average designed to reduce lag and follow price more closely than a standard EMA.
When the TEMA line turns blue, it signals an upward trend; when red, it signals a downward trend.
The Best Forex Scalping Indicator displays discrete arrows: a blue arrow signals a buy opportunity, a red arrow signals a sell.
By combining the trend filter from the TEMA and the precise entry from the arrow indicator, you get a clear and concise scalping system with fewer false entries.
Buy Entry Rules
- Ensure the TEMA line is blue, indicating a bullish trend.
- Wait for the scalping indicator to show a blue arrow, signaling a buy entry.
- Enter a buy at the close of the candle that printed the blue arrow.
- Place a stop loss beneath the recent swing low (for example, 8–12 pips on M5, or 12–18 pips on M15, depending on pair volatility).
- Set a take profit target of about 15–25 pips (on M5) or 25–40 pips (on M15).
- Alternatively, you can trail the stop once the trade moves in your favour by about half your target size.
Sell Entry Rules
- Ensure the TEMA line is red, indicating a bearish trend.
- Wait for the scalping indicator to show a red arrow, signaling a sell entry.
- Enter a sell at the close of the candle that printed the red arrow.
- Place a stop loss above the recent swing high (again 8–12 pips on M5, 12–18 pips on M15 depending on pair volatility).
- Set a take profit target of about 15–25 pips (M5) or 25–40 pips (M15), or use a trailing stop once the price moves favourably by half the target.
Advantages
- Clear trend filter and precise entry give strong trade setups.
- Simple rules, easy to apply and repeat across multiple pairs.
- Scalping style means smaller risk per trade and frequent opportunities.
- Less subjectivity — the color of the TEMA line and the arrow signal make the decision-making.
- Good for fast-moving markets where quick entries and exits are needed.
Drawbacks
- Scalping requires discipline and quick reaction — not ideal for passive traders.
- Risk of false arrows when the trend changes or the market is sideways — filtering is still required.
- Requires good broker execution, minimal slippage, and low latency to scale effectively.
Case Study 1 – USD/CHF M5
On USD/CHF during a London session, the TEMA line turned blue at 0.9271 and stayed blue across the next three full candles.
At candle close, a blue arrow from the scalping indicator appeared at 0.9278.
A buy was entered at 0.9278 with a stop loss at 0.9266 (12 pips) and a take profit set at 0.9293 (15 pips).
Within 20 minutes price hit the target, resulting in +15 pips profit.
The trend remained blue, and the next blue arrow setup produced another +18 pips before the TEMA turned red.
Case Study 2 – AUD/NZD M15
On AUD/NZD, the TEMA line turned red at 1.0825 during the early New York session and remained red for the next hour.
A red arrow appeared at 1.0818 signaling a sell entry.
Sell entered at 1.0818 with stop loss at 1.0832 (14 pips) and take profit at 1.0793 (25 pips).
Price hit the take profit after around 35 minutes, yielding +25 pips.
Later, another red arrow was printed, another trade gave +22 pips before the trend line flipped back to blue.
Strategy Tips
- Avoid trading when the TEMA line is rapidly flipping between blue and red — that signals range or indecision.
- Pair the strategy with currency pairs that have favourable spreads and liquidity (majors like EUR/USD, USD/JPY, GBP/USD, or cross-pairs with good volume).
- Consider trading only during the first 3–4 hours of the major sessions (London, New York) when volatility is higher and scalping opportunities are frequent.
- Monitor spread and execution cost – if spread and slippage eat more than half your target, skip that pair or timeframe.
- Backtest the system on each pair for at least 50 trades and track your win-rate and average pip gain/loss to ensure it fits your style and broker conditions.
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Download the “Triple exponential moving average.mq4” indicator for Metatrader 4
FAQ
How does TEMA differ from a standard 3 EMA crossover system?
While a 3 EMA system uses three separate lines, the TEMA indicator consolidates the smoothing of three averages into a single, highly responsive line.
This eliminates the clutter on your chart while providing a faster reaction to price reversals than a traditional crossover strategy would offer.
Is this indicator suitable for high-frequency scalping?
Absolutely. Because the triple-smoothing formula removes much of the lag, the TEMA is a favorite among scalpers who need to enter and exit trades quickly.
Using a shorter period setting like 10 or 14 on a 1-minute or 5-minute chart can yield very timely signals.
Can I change the colors of the signal line in the settings?
Yes, the color parameters are fully customizable within the indicator’s input tab.
You can adjust the blue and red defaults to any color scheme that fits your template, along with modifying the line thickness for better visibility during busy trading hours.
Summary
The Triple Exponential Moving Average indicator offers a refined approach to trend analysis by successfully tackling the problem of indicator delay.
Its ability to provide fast, non-repainting signals makes it a reliable companion for traders who need to react quickly to shifting market dynamics.
Whether you are a beginner looking for a simple directional guide or an experienced professional seeking to optimize entry timing, the TEMA provides the necessary clarity.
While the indicator is powerful on its own, its true potential is realized when combined with price action or volume analysis.
By focusing on the color-coded signals and maintaining disciplined risk management, you can significantly enhance your trading edge.
It is a robust, lightweight utility that belongs in the toolkit of any serious technical analyst.
