Kaufman’s Adaptive Moving Average (KAMA)
Kaufman’s Adaptive Moving Average (KAMA) is an intelligent moving average that was developed by Perry Kaufman.
The powerful trend-following indicator is based on the Exponential Moving Average (EMA) and is responsive to both trend and volatility.
It closely follows price when noise is low and smooths out the noise when price fluctuates. Like all moving averages, the KAMA can be used to visualize the trend.
Price crossing it indicates a directional change. Price can also bounce off the KAMA, which can act as dynamic support and resistance.
It is often used in combination with other signals and analysis techniques.