Function Geometric Moving Average — Indicator by RicardoSantos

Using a formula that is generally used for calculating investment over time to check gains on a commodity.

Geometric mean as described here:

Open-source script

In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.

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Want to use this script on a chart?

//@version=2
study(title='Function Geometric Moving Average', overlay=true)
//  ||-----------------------------------------------------------------------------------------||
//  ||---   As described here:
//  ||      http://www.investopedia.com/ask/answers/06/geometricmean.asp
//  ||-----------------------------------------------------------------------------------------||

src = input(close)
length = input(10)

f_gma(_src, _length)=>
    _length_adjusted = _length < 1 ? 0 : _length
    _perc_change = change(_src) / _src
    _sum = 1
    for _i = 0 to (_length_adjusted)
        _sum := _sum * (1 + _perc_change[_i])
    _return = nz(_return[1], _src) + _src * (pow(_sum, (1 / _length_adjusted)) - 1)

//plot(ema(src, length), color=color(gray, 0), linewidth=5)
plot(f_gma(src, length), color=color(blue, 0), linewidth=1)