Key Takeaways
- The TEMA is one line built from three EMAs. Patrick Mulloy took an EMA, then an EMA of that EMA, then an EMA of the second one, and combined all three in a formula that removes most of the delay that smoothing adds.
- The TEMA changes direction earlier than an EMA or a DEMA of the same period. That earlier turn is the main reason traders use the TEMA, and you see it most clearly in crossover signals.
- The TEMA still lags, because it only shows a price move after the move has started. It can't tell you where the price will go next.
- The TEMA works well in trends and badly in sideways markets. The same speed that helps in a trend makes the TEMA give false signals when price moves sideways. The EUR/USD worked example shows a losing trade caused by exactly this.
- The TEMA is not the same as the TRIX or a 3 EMA strategy. The TRIX is a momentum indicator shown in its own panel below the chart, and a 3 EMA strategy shows three separate lines on the chart.
- MT5 comes with the TEMA built in. MT4 needs a free custom indicator file, and TradingView also has the TEMA built in.
What Is a Triple Exponential Moving Average?
A triple exponential moving average (TEMA) is a moving average that combines three exponential moving averages (EMAs) into one line to reduce lag. The second EMA is calculated from the first, and the third from the second. Each extra round of smoothing makes the line slower, so the TEMA formula then removes most of that added delay.
The key difference from a normal EMA is speed. A standard EMA already gives more weight to recent prices, but when price suddenly changes direction, the EMA still takes a few candles to turn with it. The TEMA starts from the EMA and then removes most of that delay, so the TEMA reacts to a price change sooner than an SMA or EMA of the same period. This speed helps when spotting a turn early matters more to you than having a smooth line.
Who Created the TEMA?
Patrick Mulloy created the TEMA and introduced it in 1994 in Technical Analysis of Stocks & Commodities magazine, in an article titled "Smoothing Data with Faster Moving Averages". Before the TEMA, Mulloy created the double exponential moving average (DEMA), which combines two EMAs. The TEMA takes the same idea and uses three EMAs instead of two.
What the TEMA Shows You
The TEMA shows a trader three things on a chart.
- Trend direction. A rising TEMA points to an uptrend, and a falling TEMA points to a downtrend.
- Momentum shifts. When price crosses the TEMA, or when a short TEMA crosses a long TEMA, it can be an early sign that the trend is changing.
- Dynamic support or resistance. In a strong trend, price often pulls back to the TEMA line and pauses there before moving on.
The TEMA gives these readings the same way other moving averages do, and our guide on how to use moving averages in forex trading covers them in more depth. All three readings come from a single line, so the next section explains how the TEMA formula turns three EMAs into that one line.
How the Triple Exponential Moving Average Formula Works
The TEMA Formula
The TEMA formula is TEMA = (3 × EMA1) − (3 × EMA2) + EMA3, where EMA1 is the EMA of price, EMA2 is the EMA of EMA1 and EMA3 is the EMA of EMA2, all over the same period.
Calculate EMA1, the EMA of price.- Calculate EMA2, the EMA of EMA1.
- Calculate EMA3, the EMA of EMA2.
- Multiply EMA1 by 3 and EMA2 by 3.
- Subtract 3 × EMA2 from 3 × EMA1, then add EMA3.
Multiplying EMA1 by 3 pulls the TEMA line back toward the current price. This is what removes most of the delay added by EMA2 and EMA3.
How to Calculate the TEMA Step by Step
You calculate the TEMA in five steps, and every step uses the same lookback period.
- Pick the lookback period. Choose the number of bars, such as 20.
- Calculate EMA1. Take the EMA of the closing price over that period.
- Calculate EMA2. Take the EMA of the EMA1 values, using the same period.
- Calculate EMA3. Take the EMA of the EMA2 values, again using the same period.
- Plug all three into the formula. Multiply EMA1 by 3, subtract 3 times EMA2, then add EMA3.
Using the same period at every step is the part people most often get wrong. For example, a 20 period EMA1 followed by a 9 period EMA2 does not give you a TEMA. It gives you a different line that lags by a different amount.
Why Three EMAs Reduce Lag
Three EMAs reduce lag because the TEMA formula subtracts most of the delay that each round of smoothing adds. Lag is the delay between price changing direction and the indicator showing that change.
Every EMA smooths the price, and every round of smoothing adds lag. EMA2 lags more than EMA1, and EMA3 lags more than EMA2. If you just plotted the three EMAs, you would only get three lines that are each slower than the last. The TEMA formula uses the difference between them instead. Taking 3 × EMA1, subtracting 3 × EMA2 and adding back EMA3 removes most of the extra delay and moves the line closer to the current price.
This is why the TEMA stays closer to the price bars than a DEMA or a normal EMA of the same period.
- Plain EMA. One round of smoothing with no lag correction, so it changes direction last.
- DEMA. Corrects the lag from two EMAs, so it changes direction sooner.
- TEMA. Corrects the lag from three EMAs, so it changes direction first when price turns.
The TEMA is one of several indicators built to reduce lag. The zero lag exponential moving average does the same job with a different formula. Now that the formula is clear, the next section shows how to read the TEMA line on a chart.
How to Read the TEMA on a Chart
Reading Trend Direction
The direction of the TEMA line shows which way price is trending.
- Uptrend. The TEMA slopes up and price trades above it.
- Downtrend. The TEMA slopes down and price trades below it.
- Sideways market. The TEMA runs flat and price keeps crossing above and below it.
A steeper slope means price is moving faster in that direction, and a flattening slope means the move is slowing.
The TEMA still has some lag. After price suddenly reverses, the TEMA line keeps pointing the old way for a few candles before it turns. A TEMA with a longer period takes longer to turn than one with a short period.
TEMA Crossovers
A TEMA crossover signals a possible change of trend, and it comes in two types.
- Price crossing the TEMA. A candle closing above the TEMA is a bullish signal, and a candle closing below it is a bearish signal. This type of signal appears often, because price also crosses the line during small moves.
- A fast TEMA crossing a slow TEMA. The standard example is a 20 period TEMA crossing above a 50 period TEMA, which is a bullish signal. The 20 period TEMA crossing back below the 50 period TEMA is the bearish version.
A TEMA crossover appears earlier than the same crossover using DEMAs or EMAs, and that early signal is the main reason traders use the TEMA. The same crossover idea on much longer moving averages gives the golden cross, a slower signal that many traders watch for big trend changes.
TEMA as Support and Resistance
In a trend, price often pulls back to the TEMA line and stops there, so the TEMA can act as support or resistance that moves with price. In an uptrend, price may dip to a rising TEMA and bounce back up. In a downtrend, price may rise to a falling TEMA and turn back down.
This happens often, but not every time. If the TEMA has not acted as support or resistance on that market in the past, don't expect it to start now. Before you rely on it, check how price behaved around the line on earlier pullbacks.
Intraday traders also watch the volume weighted average price (VWAP) as a level that moves with price. The VWAP weights price by how much was traded, not by how recent it is. Everything in this section depends on the period you choose for the TEMA, and the next section covers which period to use.
What TEMA Settings Should You Use?
The best TEMA setting depends on how you trade. A 20 or 21 period TEMA is the common default, with 9 periods for fast intraday trading and 50 or 200 periods for slower swing and position trading.
| TEMA period | Best for | What you get | What you give up |
|---|---|---|---|
| 9 | Scalping and fast intraday trading | Turns almost as soon as price does, giving the earliest possible crossover | Many false signals when there is no strong trend |
| 20 or 21 | Day trading and short swing trades | The common default, with a balance of speed and smoothness | Still gives false signals in a sideways market, but less often |
| 50 | Swing trading over days to weeks | Ignores most small intraday moves but still turns earlier than a 50 EMA | Misses the first part of a fast move |
| 200 | Position trading and trend filtering | Shows the big picture trend and rarely changes direction | Far too slow to time an entry on its own |
The trade off is speed against false signals. A short period turns quickly but gives more false signals, while a long period gives fewer false signals but turns later. Once you know how to read the TEMA and which period suits you, the next step is using it to enter and exit trades.
How to Trade With the Triple Exponential Moving Average Strategy
The TEMA Crossover Setup
The TEMA crossover setup means trading in the direction of a fast TEMA crossing a slow TEMA, such as a 20 period TEMA crossing a 50 period TEMA. The setup only works well when the market is trending.
- Check the market is trending. Look for higher highs and higher lows in an uptrend, or lower highs and lower lows in a downtrend. Skip the setup when price is moving sideways.
- Enter after the cross. Buy when the 20 TEMA closes above the 50 TEMA. Sell when the 20 TEMA closes below the 50 TEMA.
- Place the stop. Put the stop just beyond the most recent swing low for a buy, or the most recent swing high for a sell.
- Exit on the opposite cross. Close the trade when the 20 TEMA crosses back over the 50 TEMA, or when the stop is hit.
The crossover shows that a trend change has already started. It doesn't forecast a new trend, and any crossover can fail. The same idea of a fast line crossing a slow line is behind the golden cross and death cross signals, which use much longer moving averages.
Combining the TEMA With MACD or RSI
Using the TEMA with the MACD or the RSI helps you filter out weak crossovers, because each one checks something the TEMA can't show on its own.
- TEMA with MACD: The MACD (moving average convergence divergence) measures momentum using the gap between two moving averages. When a TEMA crossover happens at the same time as the MACD line crossing its signal line in the same direction, the trend and the momentum point the same way. That gives you more reason to trust the TEMA signal than the crossover on its own.
- TEMA with RSI: The RSI (relative strength index) measures whether price has moved too far too fast, on a scale of 0 to 100. Readings above 70 usually mean overbought, and readings below 30 usually mean oversold. A bullish TEMA crossover that appears when the RSI is already above 70 often comes late in the move. Skipping those crossovers helps you avoid buying near the top of a rally that has already run far, or selling near the bottom of a sharp drop.
Worked Example: Trading the TEMA on EUR/USD
This worked example walks through the TEMA crossover setup on EUR/USD from start to finish, including one losing trade. The prices are made up to show how the setup works and are not real trades.
The setup. A 1 hour EUR/USD chart with a 20 period TEMA and a 50 period TEMA, using the rules of the TEMA crossover setup above.
Trade 1, a winning signal.
- EUR/USD has been making higher lows for two days. The 20 TEMA closes above the 50 TEMA on a candle that closes at 1.0842.
- The entry is at the open of the next candle, 1.0845.
- The most recent swing low is 1.0818, so the stop goes just below it at 1.0815. That is 30 pips of risk.
- EUR/USD climbs for the next day and a half. The 20 TEMA then crosses back below the 50 TEMA on a candle that closes at 1.0911.
- The exit is at 1.0911, a gain of 66 pips on 30 pips of risk.
Trade 2, a losing signal.
- Two days later the rally stalls, and EUR/USD moves sideways between roughly 1.0866 and 1.0920.
- The 20 TEMA closes above the 50 TEMA again, on a candle that closes at 1.0890. The entry is at 1.0892.
- The most recent swing low is 1.0866, so the stop goes at 1.0862. That is 30 pips of risk.
- Price fails to break the top of the range and falls back. The stop is hit at 1.0862, a loss of 30 pips.
The result. Across both trades, the result is a gain of 36 pips before spreads and other trading costs. The second trade shows the main weakness of the setup. EUR/USD had stopped trending, so the crossover gave a signal on a move that went nowhere.
Step 1 of the setup should have warned that the market was moving sideways, but that is easy to miss while it is happening. No filter can remove every losing trade. To test the setup on your own charts, you first need to add the TEMA to your platform.
How to Add the TEMA to MT4 and MT5
Adding the TEMA indicator in MetaTrader 4
MetaTrader 4 does not include the TEMA in its standard indicator list, so you add it as a free custom indicator. TEMA files for MT4 end in .mq4 or .ex4, and a free version is available in the MQL5 Code Base.
- Save the TEMA indicator file to your computer.
- In MT4, open File > Open Data Folder.
- Open the MQL4 folder, then the Indicators folder, and paste the file there.
- Go back to MT4 and open the Navigator panel with Ctrl+N. Right click Indicators and choose Refresh, or restart MT4.
- Find the TEMA under Indicators in the Navigator panel and drag it onto your chart.
- Set the period, such as 20, and click OK.
Only download indicator files from a source you trust.
Adding the TEMA indicator in MetaTrader 5
MetaTrader 5 includes the TEMA as a standard indicator, so there is nothing to download.
- In MT5, click Insert in the top menu.
- Go to Indicators, then Trend.
- Click Triple Exponential Moving Average.
- Set the period, such as 20, and choose the price to apply it to, usually Close.
- Change the line style if you want, then click OK.
You can also open the Navigator panel, expand Indicators and then Trend, and drag the TEMA onto your chart. The main difference from MT4 is that MT5 has the TEMA ready to use, while MT4 needs the extra step of adding a custom file.
Adding the TEMA indicator on TradingView
TradingView includes the TEMA as a built in indicator.
- Open a chart on TradingView.
- Click Indicators in the top toolbar.
- Type TEMA or Triple EMA in the search box.
- Click the Triple EMA result to add it to your chart.
- Open its settings to change the length.
Once the TEMA is on your chart, the next question is whether the DEMA, which uses two EMAs instead of three, would suit you better.
TEMA vs DEMA: What Is the Difference?
The difference between the TEMA and the DEMA is the number of EMAs each one combines. The DEMA combines two and the TEMA combines three, so the TEMA has less lag but gives more false signals.
| Attribute | DEMA | TEMA |
|---|---|---|
| Smoothing layers | Two, the EMA and an EMA of that EMA | Three, adding an EMA of the second EMA |
| Formula | (2 × EMA1) − EMA2 | (3 × EMA1) − (3 × EMA2) + EMA3 |
| Lag | Less than a plain EMA, more than a TEMA | The least of the three |
| Distance from price | Sits close to the price bars | Sits even closer to the price bars |
| False signals | Fewer, because it reacts less to small moves | More false signals in choppy or sideways markets |
| Suits | Intraday trading and scalping, where you want speed without too many false signals | Strong trends and swing trades, where spotting the turn early matters most |
Pick the DEMA when you want a fast but steadier line on intraday charts, and pick the TEMA when spotting the turn early in a strong trend matters most. Our guide to the double exponential moving average covers the DEMA in full. The next section compares the TEMA with the other common moving averages.
TEMA vs Other Moving Averages
The TEMA has the least lag of the common moving averages, because it combines three EMAs in a way that removes most of the delay. The other moving averages, such as the weighted moving average, weight price in different ways, and that weighting controls how fast each one reacts.
| Moving average | How it weights price | Lag | What it suits |
|---|---|---|---|
| SMA | Every bar in the window counts the same | Highest | Long term trend and major support or resistance levels |
| WMA | Each newer bar counts a little more than the one before, by the same step each time | High | Traders who want a faster line than an SMA with simpler maths than an EMA |
| EMA | Recent bars count much more than older ones | Medium | The everyday default across most trading styles |
| DEMA | Two EMAs combined to remove lag | Low | Intraday trading where you still want a fairly smooth line |
| TEMA | Three EMAs combined to remove more lag | Lowest | Trending markets where spotting the turn early matters most |
| VWMA / VWAP | By how much was traded, not by how recent | Varies | Checking whether a move has strong trading volume behind it |
If you're choosing between the two most common moving averages, our comparison of EMA vs SMA covers that decision. Our guides volume weighted moving average (VWMA) explain how those two work.
TEMA vs the Exponential Moving Average
The TEMA is built from EMAs, so comparing the TEMA with the EMA is not a like for like comparison. The TEMA starts with an EMA, smooths it two more times, and then uses its formula to remove most of the lag that the extra smoothing adds.
Those extra steps make the TEMA faster than the EMA, but they also make the TEMA react to more small price moves that go nowhere.
- What you gain. The TEMA turns earlier than an EMA of the same period and sits closer to price.
- What you give up. The TEMA changes direction more often and gives more false signals when price moves sideways.
If you want fewer signals and a steadier line, the plain EMA is the better fit. Our guide on how to use the EMA indicator covers it in detail.
TEMA vs the Simple Moving Average
The key difference between the TEMA and the simple moving average (SMA) is weighting. The SMA gives every bar in its window the same weight, so a price from 20 bars ago counts as much as the latest price. That makes the SMA smooth but slow, and the SMA has the most lag of all the common moving averages.
The TEMA gives more weight to recent prices and then removes most of the remaining lag, so the TEMA reacts much sooner than the SMA. Traders often use the simple moving average for long term trends and the TEMA for timing turns.
Indicators People Confuse With the TEMA
The two indicators most often confused with the TEMA are the TRIX and the 3 EMA strategy. Both have names similar to the TEMA, but neither one works the same way.
| Indicator | What it is | Where it sits on the chart | What it signals |
|---|---|---|---|
| TEMA | One trend line built from three EMAs | On the price, as an overlay | Trend direction, and trend changes through crossovers |
| TRIX | A momentum oscillator built on a triple smoothed EMA | In its own panel below the chart | Momentum, and divergence from price |
| 3 EMA strategy | Three separate EMAs of different lengths, plotted together | On the price, as three overlays | Trend strength from the order of the lines, with entries when price pulls back to the middle line |
TEMA vs TRIX
The TEMA is a trend line that sits on the price chart, while the TRIX is a momentum oscillator that sits in its own panel below the chart. Both are built on an EMA smoothed three times, which is why people mix them up.
The TEMA uses its three EMAs to make a faster moving average that follows price. The TRIX, developed by Jack Hutson, takes an EMA smoothed three times and shows how fast it is changing, as a percentage. The TRIX line moves above and below a zero line and is used to read momentum and divergence, which is when the TRIX and price move in opposite directions. The TRIX is not used to read trend direction on the price chart.
Some sources use the two names as if they mean the same thing, but they don't. If an indicator shows in a separate window around a zero line, it is the TRIX, not the TEMA.
TEMA vs the 3 EMA Strategy
The TEMA is one line built from three EMA calculations, while the 3 EMA strategy shows three separate lines on the chart. The names sound almost the same, but they are different tools.
A 3 EMA strategy plots three EMAs of different lengths, such as 9, 21 and 50 periods. Traders read trend strength from the order of the lines. When the 9 EMA is above the 21 EMA and both are above the 50 EMA, the uptrend is strong. Traders often enter when price pulls back to the middle line.
The TEMA uses one period and shows one line, and you never see its three EMAs on the chart. If you want a system that uses several lines crossing each other, see our guide to the moving average crossover. Now that it is clear what the TEMA is and what it is not, the next section covers where the TEMA falls short.
Limits and Risks of the Triple Exponential Moving Average
Whipsaws in Ranging Markets
The main risk of the TEMA is whipsaws in ranging markets. A whipsaw is when a signal appears and then quickly reverses, which happens a lot when price moves sideways. The speed that helps in a trend works against you in a sideways market. The TEMA follows every small swing, so price crosses the line again and again, and each crossover gives a signal on a move that goes nowhere.
A few habits help limit the damage.
- Check for a trend first, using higher highs and higher lows or a longer moving average.
- Use a longer TEMA period or a higher timeframe to filter out small swings.
- Stay out of the market when the fast and slow TEMAs keep crossing back and forth.
Signals built from much longer moving averages, such as the death cross, give fewer false signals but arrive later.
The TEMA Still Lags
The TEMA reduces lag, but it does not remove it. The TEMA is a lagging indicator built only from past prices, so it shows a move only after the move has started.
Some descriptions make the TEMA sound almost real time, which is not true. The formula removes most of the delay that smoothing adds, but price still has to move before the line can turn. By the time a TEMA crossover appears, part of the move is already over.
Treat every TEMA signal as a sign of what price has already done, not a forecast of what price will do next. No TEMA signal or crossover is guaranteed to work.
Frequently Asked Questions
Is the TEMA a Leading or Lagging Indicator?
The TEMA is a lagging indicator. It is calculated from past prices, so it shows a trend only after the trend starts. The TEMA has less lag than an SMA, EMA or DEMA, but it does not predict price.
Does the TEMA Repaint?
No, the standard TEMA does not repaint. It is calculated on closed candles, so once a candle closes, its TEMA value stays fixed. The value on the current candle moves with price until that candle closes, which is normal live updating, not repainting.
What Is the Difference Between the TEMA and the T3 Moving Average?
The T3 moving average, created by Tim Tillson, is also built from repeated EMAs, and it has a volume factor setting that controls how smooth the line is. Despite its name, the volume factor has nothing to do with traded volume. The TEMA uses a fixed formula with only one setting, the period. Both are fast moving averages, but the T3 usually draws a smoother line, while the TEMA stays closer to price.
Can You Calculate the TEMA in Excel?
Yes, you can calculate the TEMA in Excel. You build one column for EMA1 from the price, a second column for EMA2 from EMA1 and a third column for EMA3 from EMA2, all with the same period. A final column applies the formula (3 × EMA1) − (3 × EMA2) + EMA3.
Is the TEMA Indicator Free on MT4 and MT5?
Yes, the TEMA indicator is free on both platforms. MT5 includes it as a standard indicator under Insert > Indicators > Trend. MT4 does not include it as standard, but free TEMA indicator files are available and can be added as a custom indicator.
