# Indicator Toolbox – Delta Moving Average

## Delta Moving Average

The original Analysis Toolbox articles discussed the various market cycles including trends and continuations. This part of the The Trader’s Indicator Series focuses on the Indicator Toolbox, as we will discuss various indicators that are found on most trading platforms. We will discuss the indicator in the context of the chosen market, and if it resonates with you, please continue to do your own analysis with it. Trading successfully is all about feeling comfortable with a methodology and using that system repeatedly even when boredom sets in. I will be discussing indicators in alphabetical order that can be found on the MotiveWave platform. This week learn how to use the Delta Moving Average trading indicator (for a free 2-week trial CLICK HERE)

 This Delta Moving Average displays a moving average of the difference between the two given inputs over a given range of bars (Delta Range). The formula for this is as follows: Moving Average (input1-input2[d], n) where input[d] is the input value of a bar d bars ago.

### Delta Moving Average

#### INTRODUCTION

The Delta Moving Average (Delta MA) is used to see small changes in the direction of the moving average curve on the price chart, which is normally difficult to see. (Delta is the fourth letter of the Greek alphabet and signifies a very small change). Delta MA helps to give traders a heads up to a trend change from long to short or short to long. In the EUR/USD chart above, the Delta MA is plotted as a histogram below the price chart and for illustration purposes. The moving average used on the chart is the 10-period SMA, to correspond to the SMA used in the indicator calculation.

The formula, Moving Average (input1-input2[d], n), where input[d] is the input value of a bar d bars ago, is based on the following user defined inputs:

• Input1 = price, user defined, default is close
• Input2 = price, user defined, default is open
• Method = moving average (ma), user defined, default is SMA
• Period = user defined, default is 10
• deltaRange = user defined, default is 5
• index = current bar number

#### USING THE DELTA MOVING AVERAGE TOOL TRENDS: The first step is to look for signs that a market is trending or about to trend. This can be done by looking at the fundamentals and focusing on markets that are starting to move. Create a watch list. After deciding that a stock sector, currency grouping or commodity is about to trend, then use the Delta MA indicator to join the trend. 