KAMA (Kaufman's Adaptive Moving Average) — what it is and how to use it in trading
Definition
KAMA (Kaufman's Adaptive Moving Average) is an overlay that, unlike WMA/DEMA/TEMA/HMA with their fixed lag, adjusts its own smoothing speed to the market — slowing down in a range and speeding up once a real trend begins.
How it works in the builder
The kama operand takes three parameters: period (default 10 — the window for estimating movement "efficiency"), and pow1/pow2 (default 2 and 30 — the fast and slow smoothing constants). In essence, KAMA measures how "efficiently" price traveled over period bars — net directional movement relative to the sum of all back-and-forth wiggles; the higher the efficiency, the closer the smoothing speed gets to the fast constant (pow1), the lower it is, the closer it gets to the slow one (pow2).
What it looks like on the chart
In the illustration, the KAMA line stays nearly flat during the opening sideways candles, then steeply and quickly catches up to price once a real trend starts — two different lag regimes visible in one line, unlike the single fixed lag of WMA/DEMA/TEMA/HMA.
Typical use
Used as a "smarter" trend filter that does not lag during quiet consolidation but still confidently catches up on a sharp breakout. Typical condition: close crossed_above kama(10, 2, 30) — an entry without the extra noise a simpler average would generate during a range.
Common pitfalls
Three parameters are harder to intuit than the single period most moving averages use. The efficiency estimate is retrospective, built on the last period bars, so confirming a regime change still takes a little time — adaptivity cuts lag once a trend is already under way, but does not erase the fundamental lag of any moving average right at the reversal itself.
This block is available in the strategy builder
137 no-code blocks — build an entry condition with this term and test it on history
Historical results do not guarantee future ones. The service is an informational and analytical tool, not an individual investment recommendation; trades are not executed.