+1 888 340 6572

# Trend Identificator > DEMA1

Article/Author: S&C Magazine, Traders Tips, 01/1994

File Includes: Indicator - DEMA1

Category: Indicator > Trend Identificator

Description:

This indicator plots DEMA1. DEMA1 is 1-parameter double smoothed exponenetial moving average. It is calculated according to this formula:

DEMA1 = 2EMA1 - EMA2,

where EMA1m = aCm + (1 - a)EMA1m - 1 and EMA2m = aEMA1m + (1 - a)EMA2m - 1.

EMA1 is the single exponential moving average of the original data. EMA2 smoothes S1 exponentially, revealing that it is the double EMA. In formal time series forecasting, however, these two statistics are used to calculate the estimates b0 and b1 for the real regression coefficients b0 and b1 and then formulate the final forecasting equation for a forecast t time units in the future.

Usage:

You can use DEMA both as moving average and as trend identificator. The DEMA1 filter can smooth price fluctuation to aid in trend identification. The trend of an indicator can represent the trend of the market. If the DEMA1 is in an uptrend and the Chaikin money flow is in positive territory, then higher prices are likely.

Inputs:

Price - data type to use in calculation
Length - number of bars to calculate

EasyLanguage Code:
```INPUTS:	PRICE(CLOSE), LENGTH(30);
VARS:	X1(0), X2(0), DEMA1(0);

X1= XAVERAGE(PRICE,LENGTH);
X2= XAVERAGE(XAVERAGE(PRICE,LENGTH),LENGTH);

DEMA1 = X1 * 2 - X2;

PLOT1(DEMA1, "DEMA1");

{COPYRIGHT C 1997, TECHNICAL ANALYSIS, INC.}```