Developed by Tim Tillson, the Tilson Moving Average (T3) is a trend indicator with the advantage of having less lag than other ones. That is, a faster moving average.

The T3 moving average is an indicator of an indicator since it includes several EMAs of another EMA. Unlike any other moving average, it adds the so-called volume factor, a value between 0 and 1.

Like the SMA, traders typically use this indicator to spot trends and trend reversals. It is mainly done by crossovers between a fast and a slow moving average.

When the fast moving average crosses the slow one upwards, a buy signal is generated due to the price shows bullish signs. However, when the fast moving average crosses the slow one down the opposite happens, the bears are taking over and produces a sell signal.