T-3 moving average can help find trends

see this reference

http://www.lind-waldock.com/edu/newsletter/402/nl_402_art02.shtml

Moving averages have always been a favorite tool among technicians.
I have used moving averages since 1975
and believe that a good moving average can:
a) define the trend
b) act as support and resistance and
c) be used/configured as a momentum oscillator.

Over the years, I have seen many attempts at constructing a “better moving average.” I'm sure you've heard of 20-day, 50-day and 200-day moving averages.

After testing and examining hundreds of algorithms, I would like to share with you the one moving average I use every day to guide my trading.

Three years ago, I met Tim Tillson. Tim wrote a great article in the January 1998 issue of “Technical Analysis of Stocks and Commodities” titled: “Better Moving Averages.” Many traders who have been exposed to Tim's work agree that he has designed a moving average that is a better tool than most simple, weighted or exponential averages.
Tim's goal in constructing the T3 was to remove random noise from the underlying time series (your favorite stock or commodity). His moving averages exhibit very desirable characteristics. The T3 is an adaptive moving average that is smooth, but is not sensitive to random noise in the issue you are monitoring. Also, the T3 modifies the “lag and overshoot” properties of a simple moving average. In other words, the T3 draws a very smooth moving average and has a tendency to be rather sensitive to significant directional changes in the market (mostly, eliminating the “whipsawing” that many traders are familiar with when using simple moving averages). I won't get into the mathematical complexities of the formula on which the T3 is based here—more important is how it can be applied to your trading.

http://www.lind-waldock.com/images/lf_402_chart1.gif
Chart 1 shows how well the T3 defines trend
the T3 can define the direction of the market with very little lag. . . don't trade against that direction.

When the T3 has a positive posture (pointing up) we see an abundance of white candles (days when the bulls are in control and the close is higher than the opening). When the T3 has a negative slope, the market has a tendency to produce a majority of black candles.
Let's review the concepts I have presented by looking at Chart 4. In early November, April gold futures turned up. The T3 sensed the directional change and adapted quickly to the upside. For the following four weeks of trading, purchasing gold at or near the T3 line would have been very rewarding. As the price of gold painted a roller-coaster pattern on the charts, the T3 consistently pointed to the direction of the trend and provided support and resistance as gold bounced up-down-up-down-up-down.

T3 Can Help You Find the Trend
Markets draw pictures that we interpret through chart analysis. All my chart analysis starts with the identification of the trend. I only trade in the direction of the trend. The T3, an adaptive moving average, can help you discern trend direction. Always trading with the trend will improve most investors' decisions. Using a moving average as support and resistance is a way to help you improve entry and exit strategies. I use these tools daily and I encourage you to take the time to investigate how they might help you.
http://www.lind-waldock.com/images/lf_402_chart4.gif