QWMA - quadratic weighted moving average:
QWMA - "quadratic weighet moving average" new generation.
Author: Mladen Rakic
As usual, some addition ...
Floating levels are quite useful when it comes to filtering out false signals. For indicators that are in their nature, a sort of an average, it was difficult to determine when it is signaling a trend change and when it did not. When a slope was used for that, a lot of false signals could be generated.
Adding floating levels to an indicator is implicitly converting such average type indicators to a sort of oscillator (with known bounds) without changing the value of the indicator at all, and then the whole estimation process can be left to the simple math. Here is one example that speaks for itself and which shows clearly how floating levels are transforming average type indicators into cleaner way to find a trend.
Of course there will be false signals - after all we are not using holly grails (yet :)), but this type of filtering is proving to be useful each and every day and makes the traders life a bit easier