The name of the KAMA mt5 forex indicator stands for the Kaufman Adaptive Moving Average(MA).
Perry Kaufman, the author of that forex indicator, first introduced that concept in his book Smarter Forex Trading: Improving Performance in Changing Markets in 1995.
This is a version of the adaptive moving average(MA), built on the exponentially smoothed moving averagely mixed with the traditional methods of applying volatility as a dynamically varying smoothing constant.
The forex indicator is displayed directly on the main trading chart.
It fits all kinds of mt5 timeframes and mt5 currency pairs.
The forex indicator settings can be modified directly from the input tab. Feel free to use it with the settings and indicator parameters to fit your preferences. Let’s look at these inputs below.
Period – defines the calculation period;
Applied price – represents the price used for calculations.
The formula for the KAMA mt5 forex indicator:
The calculations of the KAMA forex indicator are based on the following formula:
KAMA[i] = KAMA[i-1] + sc * (Price[i] – KAMA[i-1])
Where:
sc = (er * 0.6015 + 0.0645) * (er * 0.6015 + 0.0645),
er = Abs(Price[i] – Price[i-Period+1]) / Sum1, and
Sum1 = Sum(Abs(Price[i] – Price[i-1])) from (i-Period+1)
How to use the KAMA mt5 forex indicator:
The KAMA mt5 forex indicator can be used as a dynamic resistance and support level, and the value of the given period is adjusted upwards (try using 100 as the value of the period).
, the price is considered bullish when the chart candles are aligned above the KAMA line. Conversely, the price is considered bearish when the candles are aligned below the KAMA line.
How to set up the KAMA indicator in MT5?
Installation Guide
Copy and paste the KAMA.mq5 or KAMA—ex5 indicator files into the MQL5 folder of the MetaTrader 5 trading platform.
You can gain access to this folder by clicking the top menu options, which goes as follows:
File > Open Data Folder > MQL5 > Indicators (paste here).
Now go to the left side of your MT5 terminal. In the Navigator, find the gauge name, right-click it, and select Attach to the chart.
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Bottom Line
The KAMA mt5 forex indicator is worth adding to your trading collection but remember to have realistic expectations. Just like any other technical analysis tool, it cannot provide good accurate signals 100% of the time. Thus, this mt5 forex indicator provides bad false signals occasionally. Its performance will change depending on market conditions. Feel free to make your trading system based on it.
