Double Exponential Moving Average (DE M A)

Related: Triple Exponential Average (TR I X) - another powerful indicator for MetaTrader 5 traders.

Double Exponential Moving Average technical Indicator (DEMA) was developed by Patrick Mulloy and published in February 1994 in the "Technical Analysis of Stocks & Commodities" magazine.

Also recommended: Triple Exponential Moving Average (TE M A) - similar indicator with strong performance on MetaTrader 5.

It is used for smoothing price series and is applied directly on a price chart of a financial security. Besides, it can be used for smoothing values of other indicators.
The advantage of this indicator is that it eliminates false signals at the saw-toothed price movement and allows saving a position at a strong trend.
Double Exponential Moving Average Indicator
Calculation:
This indicator is based on the Exponential Moving Average (EMA). Let's view the error of price deviation from EMA value:
err(i) = Price(i) - EMA(Price, N, i)
where:

err(i) - current EMA error;

Price(i) - current price;

EMA(Price, N, i) - current EMA value of Price series with N period.
Let's add the value of the exponential average error to the value of the exponential moving average of a price and we will receive DEMA:
DEMA(i) = EMA(Price, N, i) + EMA(err, N, i) = EMA(Price, N, i) + EMA(Price - EMA(Price, N, i), N, i) == 2 * EMA(Price, N, i) - EMA(Price - EMA(Price, N, i), N, i) = 2 * EMA(Price, N, i) - EMA2(Price, N, i)
where:

EMA(err, N, i) - current value of the exponential average of error err;

EMA2(Price, N, i) - current value of the double consequential smoothing of prices.

You may also like: Demo File Read Double - excellent alternative for indicator users on MetaTrader 5.