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🧭 Trend Indicators

Trend indicators answer the most basic question in technical analysis: "which way is the price actually going, once the session-to-session noise is filtered out?" They all act as low-pass filters on the price series, smoothing short-term fluctuations to reveal the underlying direction.

💡 What This Group Measures

A trend indicator estimates the local mean of the price process (or, for ADX/Aroon, the strength and timing of directional moves). None of them predict the future; they describe the recent past in a way that is less noisy than the raw close price, which makes crossovers and slope changes easier to act on.

📋 Indicators in This Category

Indicator What It Measures Key Use Details
EMA Exponentially-weighted trend Golden/death cross detection 📖
SMA Equally-weighted trend Stable baseline and crossover reference 📖
KAMA Adaptive, efficiency-aware trend Trend-following in choppy vs trending regimes 📖
ADX Trend strength (not direction) Filtering out range-bound markets 📖
Aroon Time since last extreme high/low Detecting the birth of a new trend 📖

📥 Data Requirements

Indicator Inputs Notes
EMA / SMA / KAMA close Pure price-smoothing filters
ADX high, low, close Needs directional movement (+DM/-DM) and true range
Aroon high, low Uses only the timing of extremes, not their magnitude

🔍 Comparison Table

Indicator Default Period Output Range Filter Type
EMA 14 Price scale IIR (1 pole)
SMA 20 Price scale FIR (rectangular window)
KAMA 10 Price scale Adaptive IIR (variable \(\alpha\))
ADX 14 0–100 Smoothed ratio of directional movement
Aroon 14 0–100 (Up/Down), −100–100 (Oscillator) Time-since-extreme counter 
flowchart LR
    P["💹 Price / OHLC series"] --> EMA["📉 EMA"]
    P --> SMA["📏 SMA"]
    P --> KAMA["🛣️ KAMA"]
    P --> ADX["💹 ADX (+DI/-DI)"]
    P --> AROON["⏱️ Aroon"]
    EMA & SMA & KAMA --> DIR["🧭 Direction estimate"]
    ADX & AROON --> STR["💪 Strength / timing estimate"]

Direction vs strength

EMA, SMA and KAMA tell you where the trend is; ADX and Aroon tell you how convinced you should be that a trend exists at all. Combining a moving average with ADX is a classic way to avoid whipsaws in sideways markets.