A Variable Moving Average is an exponential moving average that's able to automatically adjust its smoothing percentage based on market volatility. Sensitivity is increased by giving more weight given to the current data thus making it a better signal indicator for short and long term markets.
Most methods for calculating Moving Averages are unable to compensate for sideways moving prices versus trending markets and often produce numerous false signals. When prices move up and down over an extended period, longer term moving averages are slow to react to reversals in trend. By automatic adjustment of the smoothing constant, a Variable Moving Average adjusts its sensitivity and enables it to perform better in either type of market conditions.
Calculation:
Constant = 2/(1+Period)
PrevPrice = Previous Price
CMO9= 9-day Chande Momentum Oscillator value
Inputs: Please refer to Moving Averages
Indicator Type: Trend