Triple Exponential Moving Average (TEMA)
The Lag-Slaying Superhero of Moving Averages
In 1994, Patrick Mulloy - fresh off inventing the DEMA - decided to crank it up a notch. He published the Triple Exponential Moving Average (TEMA) in Technical Analysis of Stocks & Commodities, aiming to squash even more of that pesky lag that plagues traditional moving averages. TEMA takes the EMA, doubles down, then triples it with a clever combo that keeps things responsive without turning into a jittery mess. It's like giving your trend detection a triple espresso shot - faster signals, tighter tracking, and still smooth enough to read the real moves.
The Math Magic - How TEMA Gets Its Superpowers
TEMA isn't just blindly smoothing three times - it's a smart blend:
- EMA1 = Standard Exponential Moving Average of price (period n)
- EMA2 = EMA of EMA1
- EMA3 = EMA of EMA2
Then the wizardry: TEMA = 3 × EMA1 - 3 × EMA2 + EMA3
This formula amplifies the latest prices while cleverly canceling out much of the lag. Result? TEMA hugs price turns tighter than DEMA or plain EMA, spotting reversals earlier.
Here's TEMA (orange) vs DEMA (yellow) and EMA (purple) - see how TEMA leads the pack:
It needs roughly 3×n data points to stabilize - a small price for the speed boost.
What Sets TEMA Apart - Faster, But Watch the Overshoot
TEMA's standout tricks:
- Minimal lag: Reacts quickest among EMA family - great for catching trend changes early.
- Tight tracking: Follows price closely in trends, acting like dynamic support/resistance.
- More signals: Perfect for active traders, but can overshoot on sharp reversals (hello, occasional fakeouts).
- Not ultra-smooth: Unlike Tillson's T3, TEMA prioritizes speed over velvet smoothness.
In trending markets, it's a beast. In choppy ones? It might whip you around if you're not careful.
Classic TEMA hugging a strong uptrend:
Tuning the Dial - Picking Periods Like a Pro
Only one main parameter: the period n.
- Short (8-15): Nimble for day trading or scalping - lots of signals, higher noise.
- Medium (20-30): Balanced for swing trading most assets.
- Longer (50+): Cleaner trends on higher timeframes, dynamic S/R levels.
Start with classics like 9, 21, or 50. Test on your market - volatile ones (crypto) love shorter; steady stocks prefer longer.
Battle-Tested Ways to Trade TEMA
Proven plays that put TEMA's speed to work:
- Price crossover: Buy when price closes above TEMA, sell/short below. Simple trend filter.
- Dual TEMA system: Fast TEMA(9) crossing slow TEMA(21) = strong entry signal (bullish up, bearish down).
- Pullback buys: In uptrend, dip to TEMA then bounce - enter on close above, stop below swing low.
- Combo power: Pair with MACD or RSI for confirmation - TEMA for direction, oscillator for timing.
Volume spike or higher-timeframe alignment? That's your green light to trust the signal.
TEMA spotting reversals and riding trends smoothly:
The Wins, the Warnings, and the Whipsaws
Superpowers
- Least lag in the EMA family - earlier entries/exits than DEMA or EMA.
- Excellent for short-term trend spotting and reversals.
- Available everywhere: TradingView, MT4/5, Thinkorswim - easy to plot.
Kryptonite
- Can overshoot violently on fake reversals - more false signals in ranges.
- Less smooth than T3 - trades speed for potential noise.
- Still needs confirmation; no holy grail here.
Your TEMA Deployment Playbook
- Match period to style: aggressive short n, patient longer n.
- Confirm with bigger timeframe trend or momentum tools.
- Risk smart: Stops beyond recent highs/lows or TEMA ± ATR buffer.
- Backtest obsessively - find what kills whipsaws on your assets.
Key Takeaways
TEMA crushes lag harder than DEMA or EMA - perfect for spotting turns fast.
Triple combo formula gives super-responsive trend tracking with decent smoothness.
Shines in trending markets as filter, crossover engine, or dynamic level.
Beware overshoots and chop - always confirm and control risk tightly.
Tune, test, and combine wisely - a sharp TEMA setup can give you that precious edge in fast markets. Stay disciplined and keep those charts rocking!
Triple Exponential Moving Average (TEMA)
The Lag-Slaying Superhero of Moving Averages
In 1994, Patrick Mulloy - fresh off inventing the DEMA - decided to crank it up a notch. He published the Triple Exponential Moving Average (TEMA) in Technical Analysis of Stocks & Commodities, aiming to squash even more of that pesky lag that plagues traditional moving averages. TEMA takes the EMA, doubles down, then triples it with a clever combo that keeps things responsive without turning into a jittery mess. It's like giving your trend detection a triple espresso shot - faster signals, tighter tracking, and still smooth enough to read the real moves.
Table of Contents
The Math Magic - How TEMA Gets Its Superpowers
TEMA isn't just blindly smoothing three times - it's a smart blend:
- EMA1 = Standard Exponential Moving Average of price (period n)
- EMA2 = EMA of EMA1
- EMA3 = EMA of EMA2
Then the wizardry: TEMA = 3 × EMA1 - 3 × EMA2 + EMA3
This formula amplifies the latest prices while cleverly canceling out much of the lag. Result? TEMA hugs price turns tighter than DEMA or plain EMA, spotting reversals earlier.
Here's TEMA (orange) vs DEMA (yellow) and EMA (purple) - see how TEMA leads the pack:
It needs roughly 3×n data points to stabilize - a small price for the speed boost.
What Sets TEMA Apart - Faster, But Watch the Overshoot
TEMA's standout tricks:
- Minimal lag: Reacts quickest among EMA family - great for catching trend changes early.
- Tight tracking: Follows price closely in trends, acting like dynamic support/resistance.
- More signals: Perfect for active traders, but can overshoot on sharp reversals (hello, occasional fakeouts).
- Not ultra-smooth: Unlike Tillson's T3, TEMA prioritizes speed over velvet smoothness.
In trending markets, it's a beast. In choppy ones? It might whip you around if you're not careful.
Classic TEMA hugging a strong uptrend:
Tuning the Dial - Picking Periods Like a Pro
Only one main parameter: the period n.
- Short (8-15): Nimble for day trading or scalping - lots of signals, higher noise.
- Medium (20-30): Balanced for swing trading most assets.
- Longer (50+): Cleaner trends on higher timeframes, dynamic S/R levels.
Start with classics like 9, 21, or 50. Test on your market - volatile ones (crypto) love shorter; steady stocks prefer longer.
Battle-Tested Ways to Trade TEMA
Proven plays that put TEMA's speed to work:
- Price crossover: Buy when price closes above TEMA, sell/short below. Simple trend filter.
- Dual TEMA system: Fast TEMA(9) crossing slow TEMA(21) = strong entry signal (bullish up, bearish down).
- Pullback buys: In uptrend, dip to TEMA then bounce - enter on close above, stop below swing low.
- Combo power: Pair with MACD or RSI for confirmation - TEMA for direction, oscillator for timing.
Volume spike or higher-timeframe alignment? That's your green light to trust the signal.
TEMA spotting reversals and riding trends smoothly:
The Wins, the Warnings, and the Whipsaws
Superpowers
- Least lag in the EMA family - earlier entries/exits than DEMA or EMA.
- Excellent for short-term trend spotting and reversals.
- Available everywhere: TradingView, MT4/5, Thinkorswim - easy to plot.
Kryptonite
- Can overshoot violently on fake reversals - more false signals in ranges.
- Less smooth than T3 - trades speed for potential noise.
- Still needs confirmation; no holy grail here.
Your TEMA Deployment Playbook
- Match period to style: aggressive short n, patient longer n.
- Confirm with bigger timeframe trend or momentum tools.
- Risk smart: Stops beyond recent highs/lows or TEMA ± ATR buffer.
- Backtest obsessively - find what kills whipsaws on your assets.
Key Takeaways
TEMA crushes lag harder than DEMA or EMA - perfect for spotting turns fast.
Triple combo formula gives super-responsive trend tracking with decent smoothness.
Shines in trending markets as filter, crossover engine, or dynamic level.
Beware overshoots and chop - always confirm and control risk tightly.
Tune, test, and combine wisely - a sharp TEMA setup can give you that precious edge in fast markets. Stay disciplined and keep those charts rocking!
Related Terms
Apply This Knowledge
Ready to put Triple Exponential Moving Average (TEMA) into practice? Use our tools to analyze your portfolio and explore market opportunities.
This content is also available on our main website for public access.