T3 moving average: what the volume factor really changes

You switch from a plain EMA to something smoother, and it finally stops flipping in the chop. Then the trend turns, and the smooth line takes so long to agree that the move is half gone.

The T3 moving average is built for that trade-off. It is Tim Tillson’s answer to “smooth but not late”, and its whole personality comes down to one input most traders never touch: the volume factor. Once you know what that dial does, you can decide whether T3 earns a place on your chart or only looks tidy.

What is the T3 moving average?

T3 is a trend line made of six exponential averages chained together. Tim Tillson described it in his article “Smoothing Techniques for More Accurate Signals” in Technical Analysis of Stocks and Commodities, January 1998. His aim was a line smoother than the fast averages of the day without inheriting the lag of a long EMA.

The building block is what Tillson called a generalized DEMA. Patrick Mulloy’s double exponential moving average cuts lag by measuring how far an average trails price and adding that gap back. Tillson made the size of that add-back adjustable, then ran the result through itself three times.

The picture explains both of T3’s habits at once: stacking rounds is where the smoothness comes from, and the depth of the stack is why the first stretch of any chart is unreliable.

What does the T3 volume factor do?

It decides how much lag correction each round adds. Set it to zero and every round collapses into a plain exponential moving average, so T3 becomes a very smooth, very slow EMA stack (the difference between an EMA and an SMA is the starting point here). Set it to one and every round is a full DEMA. Anything between is a blend.

The name trips people up. Many traders assume a T3 with “volume” in its inputs is reading tick volume or real volume. It is not. The word describes how much of the correction gets poured in, and the indicator never looks at traded volume at all.

Moving the dial right buys an earlier turn and pays for it in overshoot, where the line swings past price at a sharp reversal before settling back.

Tillson’s suggested setting of 0.7 sits deliberately short of the right end. A full correction applied three times in a row magnifies the overshoot, and backing off to 0.7 keeps most of the speed while taming that swing.

How does T3 compare with EMA, DEMA and Hull?

T3 is the smooth end of the fast-average family. The DEMA and the Hull average chase price harder. A plain EMA is simpler but later. The table sets them side by side on the traits that matter when you are deciding what to put on a chart.

If you have already met the faster pair, the DEMA vs TEMA comparison shows what happens when the correction goes in at full strength, and the Hull moving average guide covers the weighted route to the same goal.

What T3 settings should you start with?

Keep the volume factor at 0.7 and adjust the period first. Many T3 versions load with Tillson’s default, which is a sensible starting point. Tune the period until the line stops reacting to swings you would ignore by eye, then leave it alone for a while.

Be careful when matching platforms. Not every T3 treats the period input the same way. Some versions shorten each round internally so that the full stack behaves like the number you typed. Others do not. If your MT5 T3 and your TradingView T3 look different at the same numbers, match them by eye on the same chart, not by copying settings.

Does the T3 moving average repaint?

No, not on closed bars. Each value uses prices at or before the bar it sits on, so reloading the chart will not move a finished reading. The live bar is the exception, because it updates tick by tick until the candle closes.

Two practical points follow. Judge a turn on the closed bar, because a T3 hook mid-candle can flatten by the close. And in any backtest, discard the warm-up stretch at the start of the data. Six chained averages need plenty of history before their values mean anything, and results built on those early bars will not match live trading.

Where does a smooth trend line stop helping?

At the entry. T3 is good at telling you which way the tide runs and quiet enough to stop you trading every wobble. It says nothing about where price is likely to react, where your stop belongs, or when a pullback has finished.

That is the part RelicusRoad Pro is designed for. Its levels and signals come from price structure and are confirmed at the bar close, so the chart you review later is the chart you traded. Treat T3 as the filter that tells you which side to favour, and let structure decide where the risk goes. No line, smooth or fast, replaces a stop you placed before you clicked.

Frequently asked questions

What is the T3 moving average? It is a smoothed trend line built by Tim Tillson and described in Technical Analysis of Stocks and Commodities in January 1998. It runs price through three rounds of a lag-corrected exponential average, six exponential averages in total, to get a line that is smooth in a range yet still turns reasonably early when a trend changes.

What does the volume factor in T3 mean? It is a blending weight, not a reading of market volume. At zero, each round of the T3 calculation collapses to an ordinary exponential average. At one, each round becomes a full double exponential average. Values between the two decide how much lag correction goes in, so a higher setting turns sooner and overshoots more, while a lower setting is calmer and later.

What are the best T3 settings? There is no universal best. Tillson suggested a volume factor of 0.7, and many T3 versions use it as their default. Leave it there first and adjust the period until the line ignores bars you would ignore by eye. Change the volume factor only after that, in small steps, and check the effect on the same stretch of chart each time.

Does the T3 moving average repaint? Not on closed bars. Every value comes from prices at or before the bar being plotted, so a finished candle keeps its reading when you reload the chart. The current bar is different, because it updates with each tick, and a turn you see mid-candle can flatten again before the close. Judge a T3 turn on the closed bar.

Is T3 better than the Hull moving average? They solve the problem differently. The Hull average uses weighted averages and turns very early, which suits traders who want speed and can tolerate a jumpier line. T3 is usually the smoother of the two and gives up a little speed for it. Put both on the same chart and count how often each changes direction in a range you already know was sideways.

Ready to pair a calm trend filter with entries that hold at the close? See how RelicusRoad Pro reads structure.

Written for RelicusRoad by RelicusDigital.com.