Patrick Mulloy is the man behind the double exponential moving average (DEMA), a tool designed to reduce the amount of lag present in the traditional moving averages.
Generalized DEMA on the other hand, was designed to further replace the single and double exponential moving average parts within the DEMA calculations with “volume factors” thereby enhancing the results.
Applying the “correcting” method that was created by Dr. Alexander Uhl on the generalized DEMA to yield the new “corrected” generalized DEMA – an indicator with floating levels that allows for quick trend assessment.
Finally, the indicator also supports coloring methods on slope change, on outer levels cross, on middle level cross and on average value cross.
The GBP/USD H1 chart below displays the Corrected Generalized DEMA Metatrader 5 forex indicator in action.
Basic Trading Signals
Buy Signal: Go long when the thickest line of the Corrected Generalized DEMA Metatrader 5 forex indicator turns medium sea green.
Sell Signal: Go short when the thickest line of the Corrected Generalized DEMA Metatrader 5 forex indicator becomes orange red.
Exit buy trade: Close all buy orders if while a bullish trend is on the move, the thickest medium sea green line of the Corrected Generalized DEMA indicator cross the thinner undotted line in a top downward fashion.
Exit sell trade: Close all sell orders if while a bearish trend is ongoing, the thickest orange red line of the Corrected Generalized DEMA indicator cross the thinner undotted line in a bottom up manner.
Tips: During the course of any trend, if the thickest line (also known as the corrected average) of the Corrected Generalized DEMA indicator turns silver, price is said to be in a consolidation. This is obviously not a good market entry point.
MT5 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 5
Type: chart pattern indicator
Customization options: Variable [GDEMA period, Volume factor, Price, “Correction” period (<0 no correction, 0 or 1 same as average), Color change on, Floating levels period, Upper level %, lower level], width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Copy and paste the Corr generalized DEMA.ex5 indicator into the MQL5 indicators folder of the Metatrader 5 trading platform.
You can access this folder from the top menu as follows:
File > Open Data Folder > MQL5 > Indicators (paste here)