How it is calculated
Six EMAs of the same length in a chain, each smoothing the one before. With the volume factor a, T3 is c1 e6 + c2 e5 + c3 e4 + c4 e3 where c1 = -a^3, c2 = 3a^2 + 3a^3, c3 = -6a^2 - 3a - 3a^3 and c4 = 1 + 3a + a^3 + 3a^2. Each EMA is seeded with the simple average of its own first length inputs, so the first value needs 6 times length minus 5 bars, as TA-Lib's T3.
Reference: TA-Lib T3 (Tillson 1998)
How to read it
Smoother than an EMA with similar lag. A volume factor of 0 leaves just the third EMA of the chain, higher values remove more lag at the cost of more overshoot; 0.7 is Tillson's choice. Turns of the slope are the main signal.
In a strategy
A smooth trend line, ctx.ind("t3", length=5, vfactor=0.7): long while its slope points up, flat when it turns down.
Inputs
| Input | Type | Default | Range or choices |
|---|---|---|---|
Lengthlength | Whole number | 5 | min 1, max 5000 |
Volume factorvfactor | Number | 0.7 | min 0, max 1 |
Sourcesource | Price | "close" | close, open, high, low, hl2, hlc3, ohlc4, hlcc4 |
What it draws
| Line | Drawn as |
|---|---|
| T3 | Line |
Used in
No strategy template reads it yet.