The T3 is a type of moving average, or smoothing function. It is based on the DEMA. The T3 takes the DEMA calculation and adds a vfactor which is between zero and 1. The resultant function is called the GD, or Generalized DEMA. A GD with vfactorof 1 is the same as the DEMA. A GD with a vfactor of zero is the same as an Exponential Moving Average. The T3 typically uses a vfactor of 0.7.
The T3 triple-smoothes the data series by calling the GD three times. You can pass any value for tcount to the T3 function. For instance, a tcountof 4 would be quadruple-smoothed, in effect a T4. A tcount of 1 would be a single-smoothed GD.
Any data series can be smoothed with the T3, including price or the output of another indicator.
See also DEMA and Exponential Moving Average.
The T3 was developed by Tim Tillson and was described in his January, 1998 article in Technical Analysis of Stocks & Commodities magazine.
Copyright © 2018, FM Labs, Inc.