The advanced version of the standard Moving Average indicator, which uses quite a simple procedure on decreasing temporal lag based on the increase of the Moving Average period. The method was firstly described by Manfred G. Dürschner in his article Gleitende Durchschnitte 3.0 (in German). The presented implementation uses λ = 2, which provides the best possible reduction of the lag. Higher λ increases similarity with the classic moving average.
As you see, the 3rd Generation Moving Average (red line) offers slightly less lag than the conventional EMA (blue line) and reacts to the price changes faster. Unfortunately, it still has some delay and can give false signals. This indicator can be used just like a standard moving average - to determine the direction of the current trend.
Translated from Russian by MetaQuotes Software Corp.
Original code: https://www.mql5.com/ru/code/13139
The Expert Advisor is based on the operation of its predecessor — Forex Fraus (for M1), but using the Envelopes indicator.VR Moving Average
The classic Moving Average indicator with a color change depending on the direction.