Hybrid Adaptive Momentum Average (HAMA)

Hybrid Adaptive Momentum Average (HAMA)

Imagine you want a moving average line on your chart that's usually smooth but gets really quick to follow the price when the market suddenly makes a big, fast move. That's what HAMA tries to be.

Here's the simple breakdown:

Slightly Better Starting Price: Instead of just using the closing price, HAMA first creates a slightly "smarter" starting price by giving a bit more importance to the very latest prices (like a quick WMA).

Checks Market Speed (Momentum): It then looks at how fast this "smarter price" has been moving recently.

-If the price is shooting up or down quickly, HAMA knows there's strong momentum.
-If the price is just drifting sideways, momentum is low.

Adjusts Its Own Speed: Based on this momentum:

-Strong Momentum (Fast Market): HAMA makes itself "faster." This means its line will stick closer to the current price and react quickly to changes. (It uses a shorter "period" internally).
-Weak Momentum (Slow/Choppy Market): HAMA makes itself "slower." Its line will be smoother and less jumpy, ignoring minor wiggles. (It uses a longer "period" internally).
-Draws the Line: Finally, it calculates and draws the moving average line using this automatically adjusted speed.

Why "Hybrid"?

It's called "hybrid" because it takes bits and pieces of ideas from several standard moving averages:

-Like an EMA, it's built to be responsive.
-Like a WMA, it initially focuses on recent prices.
-Inspired by the HMA, it tries to be smart about detecting momentum to adjust itself.

In a Nutshell:

The HAMA is a custom moving average that tries to be the best of both worlds: smooth in calm markets and quick to react in fast-moving markets by automatically changing its own calculation speed based on price momentum.