MAMA/FAMA (Ehlers MESA Adaptive Moving Averages)
MAMA/FAMA is a trend-following indicator that uses adaptive moving averages to respond to changes in market conditions. MAMA (MESA Adaptive Moving Average) adjusts its responsiveness to price movements, while FAMA (Following Adaptive Moving Average) is a smoother line derived from MAMA. Together, they help identify trend direction and changes in momentum.
Traders use MAMA and FAMA to analyze both price movement and the relationship between the two lines. When MAMA crosses above FAMA, it can indicate a bullish shift in momentum; a cross below can indicate a bearish shift. Traders can also compare the closing price with either line to identify when price is trading above or below an adaptive average.
For example, if Reliance’s MAMA crosses above FAMA while its closing price is also above MAMA, traders may interpret the combination as a potential bullish signal. Conversely, a closing price below FAMA while MAMA is below FAMA may suggest bearish momentum.
| Parameter | Description | Default Value |
|---|---|---|
| Fast Limit | Upper limit for the adaptive smoothing factor, controlling how quickly MAMA can respond to price changes | 0.5 |
| Slow Limit | Lower limit for the adaptive smoothing factor, controlling the minimum smoothing applied to MAMA | 0.05 |