Triple Exponential Moving Average (TEMA) is one of the types of moving average indicator that was created in 1994 by Patrick Mulloy. The Triple Exponential Moving Average smooths out price fluctuations most especially in the short term. One of the main drawbacks of the regular moving average is lag and the Triple Exponential Moving Average solves this by making use of multiple EMAs of the original EMA and removing the lag, thereby making it easier to spot trends in the market without the issue of lag.

The Triple Exponential Moving Average utilizes a smoothing function to eliminate noise caused by sharp volatility in in the market and also lag that is common in the regular moving average indicator. With this, it is easier to identify support and resistance levels on the chart and also any clear trend in the market. When the price is above the triple exponential moving average line, it is an indication that the price is bullish, and when the price is below the triple exponential moving average line, it is an indication that the price is bearish. Because of the benefits of the Triple Exponential Moving Average indicator, a lot of traders look out for crossovers and make use of it to identify buy and sell signals.

Trend Identification/Confirmation in both bearish and bullish trends with TEMA

The Triple Exponential Moving Average indicator is known to be a trend-based indicator, this makes it a very effective tool for trend identification and trend confirmation.

Bullish Trend

On the BTC/USDT chart using the 200 period TEMA, we can see that in the area where the price was in an uptrend and moving in an upward direction, the price was rising above the rising TEMA line, which is a strong indication of a bullish trend.

Bearish Trend

On the BTC/USDT chart using the 200 period TEMA, we can see that in the area where the price was in a downtrend and moving in a downward direction, the price was falling below the falling TEMA line, which is a strong indication of a bearish trend.

Support with TEMA

Looking at the BTC/USDT chart using the 50 period TEMA, we can see the various support levels on the chart. We all know that support means the ground floor where the price falls to and fails to break below the level before bounces upwards. Using TEMA on the chart, we can see the price is moving in an upward direction and the various levels where the price falls to without being able to break below that level before bouncing upwards. Using the 50 period TEMA, the price pullsback and drops at the TEMA line and continues its uptrend price movement

Resistance with TEMA

Looking at the BTC/USDT chart using the 50 period TEMA, we can see the various resistance levels on the chart. We all know that resistance means the ceiling or roof top where the price rises to and fails to break above the level before bounces downwards. Using TEMA on the chart, we can see the price is moving in a downward direction and the various levels where the price rises to without being able to break above that level before bouncing downwards. Using the 50 period TEMA, the price returns upwards and hits at the TEMA line and continues its downtrend price movement.