Last updated: 8 October 2026. Every screenshot below was recorded on 8 October 2026 on an IQ Option Practice account registered in Brazil, on EUR/USD 5-minute candles; the Chart analysis picture in Step 1 was recorded on 5 October 2026. We placed no real-money trade. The settings come from the platform’s dialog and the calculation from the published source code of the platform’s built-in indicators (Quadcode’s script library). The tested box shows what five readings of the rules did on EUR/USD 5-minute candles recorded between 29 September and 5 October 2026; it says nothing about what will happen next.
KAMA, Kaufman’s Adaptive Moving Average, is a moving average that changes its own speed. It measures how straight the recent price move was, a number between 0 and 1 called the efficiency ratio, and uses it to choose a smoothing constant between a fast and a slow average: after a straight move the line follows the price closely, and in a choppy market it flattens. On IQ Option it is drawn over the price chart as one line. The dialog opens at Period 21, Fast period 4 and Slow period 30, while the usual setting is 10, 2 and 30. We replayed five readings of the usual rules on 5-minute EUR/USD candles; all five are in the tested box.
Quick answer
- What it plots: one line over the price chart, a moving average whose speed depends on the efficiency ratio of the last candles.
- Formula: KAMA = KAMAprevious + SC × (price − KAMAprevious), with SC = (ER × (fast − slow) + slow)², where fast = 2 ÷ (Fast Period + 1) and slow = 2 ÷ (Slow Period + 1).
- Settings on the platform: Period 21, Fast period 4, Slow period 30 and Source (close). The usual settings are 10, 2 and 30.
- Reading: a rising line is an uptrend and a falling line a downtrend; a close on the other side of the line is a cross.
- Where: the Moving Averages list of the Chart analysis panel; search for KAMA.
- Tested: on EUR/USD 5-minute candles of 29 September to 5 October 2026, the plain cross of the KAMA (10, 2, 30) won 76 of 162 decided trades (46.9%), the cross held for two closes 67 of 107 (62.6%), the cross of the platform’s default KAMA 40 of 87 (46.0%) and the pullback rule 43 of 86 (50.0%) at a five-minute expiry; break-even is 54.1% at an 85% payout. Five readings, a short replay: not a promise.
How do you add KAMA on IQ Option?
Set the chart
Choose the asset, the chart type and the candle size first: the indicator is calculated from the candles on the chart. The examples in this guide use 5-minute candles on EUR/USD. These steps use the web traderoom on a Practice balance, and the numbers in each screenshot match the numbers in the text. If you do not have an account yet, see how to register.
Step 1: Open Chart analysis
Click the indicators button (1), the wave icon in the chart toolbar at the bottom left of the chart. The Chart analysis panel opens with the tabs Indicators, Templates, Widgets and Scripts. Stay on Indicators.
Step 2: Find KAMA
Type “KAMA” in the Search for indicators box (1), or open the Moving Averages list, and click Kaufman’s Adaptive Moving Average (KAMA) (2).
Step 3: Check the settings
The dialog has three tabs: Basic settings (1), Colors and display and Script. The Period (2) opens at 21, the number of candles of the efficiency ratio. The Fast period (3) opens at 4, which sets the fastest the line can be. The Slow period (4) opens at 30, which sets the slowest. The Source (5) opens at close, the price the line follows.
Step 4: Check the colours and click Apply
Open the Colors and display tab (1). The tab has one row, Main line (2), with a colour box, blue by default, and a line-style box. Click Apply (3).
Step 5: Read the lines
The KAMA is drawn over the price chart as one thin blue line (1); it has no panel of its own. In the picture it runs almost flat, above the candles, and meets them only around 08:00.
How is KAMA calculated?
KAMA is built in three steps, as the usual formula and the Quadcode source both show.
- Efficiency ratio (ER): the size of the price change over the period divided by the sum of the sizes of the single-candle changes over the same period. A price that moves in a straight line has an ER close to 1; a price that goes up and down and ends where it began has an ER close to 0. In the source, the change is taken over Period − 1 candles and the sum over Period candles.
- Smoothing constant (SC): SC = (ER × (fast − slow) + slow)², where fast = 2 ÷ (Fast Period + 1) and slow = 2 ÷ (Slow Period + 1).
- KAMA: KAMA = KAMAprevious + SC × (price − KAMAprevious). The first value is the price.
SC decides how much of the gap between the price and the line is closed on each candle. With Fast Period 4 and Slow Period 30, SC lies between (2 ÷ 31)² = 0.4% and (2 ÷ 5)² = 16%; with the usual 10, 2 and 30 it lies between 0.4% and (2 ÷ 3)² = 44%. So the settings let the line catch up with the price much faster after a straight move.
| Setting | Platform default | Usual rule | What it does |
|---|---|---|---|
| Period | 21 | 10 | Number of candles in the efficiency ratio |
| Fast period | 4 | 2 | Sets the fastest the line can be, when ER = 1 |
| Slow period | 30 | 30 | Sets the slowest the line can be, when ER = 0 |
| Source | close | | The price the line follows |
The platform draws the line for you; the formula is here so that the settings make sense. The indicator is credited to Perry Kaufman.
How do you read KAMA?
It has three common uses. First, the direction of the line shows the trend: a falling KAMA with lower lows is a downtrend and a rising KAMA with higher highs is an uptrend. Second, a close of the price on the other side of the line is a cross, which is expected to mean a change in the direction of the trend, with many whipsaws, so a filter such as waiting until the cross has held for a couple of candles is suggested. Third, two KAMAs: a slower one (10, 5, 30) for the trend and a faster one (10, 2, 30) for entries on a pullback: in an uptrend, the price dips below the fast line and then moves back above it, and a long trade opens (the downtrend is the mirror).
Because KAMA slows down in a choppy market and speeds up in a straight one, it does not cross the price in the same rhythm as a normal moving average of fixed length. Whether that helps a rule is a question for a test, which follows.
The rules, tested
We wrote the rules as exact conditions on closed candles, with the option opened at the close of the signal candle and settled one candle later (five minutes) unless stated otherwise. No expiry is given. We ran five readings and list all five, because a rule that looks good among several may do so by chance.
- Cross: Higher when a candle closes above the KAMA (10, 2, 30) after the previous candle closed at or below it; Lower when it closes below after a close at or above it.
- Cross held for two closes: the same, but the signal comes on the second close on the new side, the usual advice to “wait a couple of candles”.
- Cross with the platform default settings (21, 4, 30).
- Pullback: the KAMA (10, 5, 30) is rising (higher than one candle earlier) and a candle closes back above the KAMA (10, 2, 30) after the previous candle closed below it: Higher; the mirror is Lower. Tested with one-candle and three-candle expiries.
Tested on IQ Option: five readings of the KAMA rules, EUR/USD 5-minute candles of 29 September to 5 October 2026
| Asset and candles | EUR/USD binary (regular, not OTC): 1,334 five-minute candles (2026-09-29 01:55 to 2026-10-02 20:55 UTC and 2026-10-04 21:00 to 2026-10-05 17:00 UTC). The candles were recorded from IQ Option’s Practice traderoom. The replay places no orders; it only scores the rule on those closed candles, at an 85% payout. |
|---|---|
| Rule tested | Five readings of the usual rules on closed candles; the option opens at the close of the signal candle. Cross: Higher when a candle closes above the KAMA after a candle that closed at or below it, Lower below; with the usual KAMA (10, 2, 30), with the same cross held for two closes, and with the platform’s default KAMA (21, 4, 30). Pullback: the KAMA (10, 5, 30) rising (above its value one candle earlier) and a candle closing back above the KAMA (10, 2, 30) after the previous candle closed below it: Higher; the mirror is Lower. Expiry one candle (5 minutes), and for the pullback also three candles (15 minutes). |
| Signals | Price crosses KAMA(10,2,30), 5-minute, 1 candle: 164 signals (82 Higher, 82 Lower) Price crosses KAMA(10,2,30), held 2 closes, 5-minute, 1 candle: 108 signals (53 Higher, 55 Lower) Price crosses the default KAMA(21,4,30), 5-minute, 1 candle: 88 signals (44 Higher, 44 Lower) Pullback to KAMA(10,2,30) in a KAMA(10,5,30) trend, 5-minute, 1 candle: 88 signals (44 Higher, 44 Lower) Pullback, 5-minute, 3 candles: 88 signals (44 Higher, 44 Lower) |
| Outcomes | Price crosses KAMA(10,2,30), 5-minute, 1 candle: 76 won, 86 lost, 2 tied; 46.9% of the 162 decided trades won; net −$0.13 per $1 staked at 85% (−$0.10 at 91%) Price crosses KAMA(10,2,30), held 2 closes, 5-minute, 1 candle: 67 won, 40 lost, 1 tied; 62.6% of the 107 decided trades won; net +$0.16 per $1 staked at 85% (+$0.19 at 91%) Price crosses the default KAMA(21,4,30), 5-minute, 1 candle: 40 won, 47 lost, 1 tied; 46.0% of the 87 decided trades won; net −$0.15 per $1 staked at 85% (−$0.12 at 91%) Pullback to KAMA(10,2,30) in a KAMA(10,5,30) trend, 5-minute, 1 candle: 43 won, 43 lost, 2 tied; 50.0% of the 86 decided trades won; net −$0.07 per $1 staked at 85% (−$0.04 at 91%) Pullback, 5-minute, 3 candles: 43 won, 45 lost, 0 tied; 48.9% of the 88 decided trades won; net −$0.10 per $1 staked at 85% (−$0.07 at 91%) |
| Break-even | At an 85% payout a trade needs to win more than 54.1% of its decided trades to break even (1 ÷ 1.85); at 91%, more than 52.4% (1 ÷ 1.91). |
A replay is only a look back at candles recorded on the dates above: it placed no real orders, covers about four and a half days of one pair, and counts overlapping trades as if they were independent. A short test proves nothing about the future, and no profit and no win rate is promised here. IQ Option’s own blog on backtesting says that most strategies need dozens, and often hundreds, of trades before a result means anything.
Window A of the default KAMA (21, 4, 30) runs on 29 September from 05:27 to 11:16 on the platform clock; the Step 5 picture shows its part from 07:09 to 09:08. The close fell 23 pips between 03:00 and 07:00 (1.13569 to 1.13343), but the line moved only 11 pips (1.13612 to 1.13505): the fall was choppy, so the efficiency ratio stayed low and the line followed slowly. The line was 10 pips above the close at 05:30, 19 pips above it at 06:30 and 16 pips at 07:00, and the close came back above it only at 08:00. That is the other side of an adaptive average: it flattens in a choppy market, and a price that moves away in one go can stay far from it for hours.
Four of the five readings were below the 54.1% break-even rate of an 85% payout: the plain cross (46.9%), the cross of the default KAMA (46.0%) and the pullback at one candle (50.0%) and at three candles (48.9%). One was above it: the cross held for two closes won 62.6% (67 of 107), with an interval of 53% to 71% that contains the break-even rate. Five readings were tried, so one of them can look good by chance; none is a result to trade on.
Pros and Cons of KAMA
| Pros | Cons |
|---|---|
| The line slows down in a choppy market, so it crosses the price less often than a fast average of fixed length would. | More settings than a normal moving average, and the platform default (21, 4, 30) is not the usual setting (10, 2, 30). |
| The direction of the line gives a quick read of the trend. | It still lags: it follows the price and cannot say what comes next. |
| Two KAMAs can separate a trend filter from an entry line. | In our test most readings lost money at an 85% payout, so none of them is a signal on its own. |
Common mistakes
- Assuming the dialog opens at the usual settings. The default is 21, 4 and 30; type 10, 2 and 30 to use the usual values.
- Trading every cross. The plain cross lost more often than it won in our replay.
- Judging a rule by the reading that looks strongest. We ran five readings; only a longer test on your own pair can tell.
- Forgetting the break-even rate. At an 85% payout a trade has to win more than 54.1% to break even.
Related guides
- Moving average on IQ Option and trading with the EMA
- ALMA and LSMA on IQ Option and McGinley Dynamic
- Identifying a trend and leading and lagging indicators
- All indicator guides and all strategy guides
Frequently Asked Questions
Q: What is KAMA?
A: Kaufman’s Adaptive Moving Average: a moving average whose speed depends on the efficiency ratio, so that it follows a straight move closely and flattens in a choppy market.
Q: What settings does KAMA have on IQ Option?
A: Four: Period (21), Fast period (4), Slow period (30) and Source (close). The colour and line style of the Main line are on the Colors and display tab.
Q: What are the usual KAMA settings?
A: Period 10, Fast Period 2 and Slow Period 30, attributed to Perry Kaufman, and 10, 5 and 30 for a slower trend line. You have to type them: the dialog does not open there.
Q: How is KAMA different from an EMA?
A: An EMA uses one fixed smoothing constant. KAMA recalculates the constant on every candle from the efficiency ratio, between a slow and a fast limit.
Q: Does a cross of the price and KAMA work as a signal?
A: In our replay on EUR/USD 5-minute candles the plain cross won 76 of 162 decided trades (46.9%), below the 54.1% break-even rate at an 85% payout; waiting for a second close won 67 of 107 (62.6%). All five readings are in the tested box, and none proves anything about the future.
Q: Can I use KAMA on binary options?
A: The platform draws it on any chart. Whether a rule works is something to test on the Practice balance with the expiry you plan to use.
