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The Fractal Adaptive Moving Average (FRAMA) indicator was introduced by John Ehlers. Based on the assumption that market prices are fractal, this indicator presents a new method of adaptive smoothing. The purpose of this indicator is to eliminate bad whipsaw trades.
A moving average is generally used for trend identification. Attention is given to the direction in which the average is moving and to the relative position of prices and the moving average. Rising moving average values (direction) and prices above the moving average (position) would indicate an uptrend. Declining moving average values and prices below the moving average would indicate a downtrend.
More Info: http://www.mesasoftware.com/Papers/FRAMA.pdf
Good Research related to FRAMA: http://etfhq.com/blog/2010/10/09/frama-is-it-effective/#Best
Trading financial instruments, including foreign exchange on margin, carries a high level of risk and is not suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in financial instruments or foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.