// Licensed under the Apache License, Version 2.0
// © mihakralj
//@version=6
indicator("Exponential Decay (EDECAY)", "EDECAY", overlay=true)

//@function Calculates exponential decay: output = max(input, prev_output * (period-1)/period)
//@param source Source price series
//@param length Decay period
//@returns Decayed value that tracks peaks and descends exponentially
//@optimized Uses multiplicative decay factor for O(1) complexity per bar
edecay(series float source, simple int length) =>
    var float prev = na
    float scale = (length - 1.0) / length
    float result = na
    if na(prev)
        result := source
    else
        float d = prev * scale
        result := source > d ? source : d
    prev := result
    result

// ---------- Main loop ----------

// Inputs
i_source = input.source(close, "Source")
i_length = input.int(5, "Length", minval=1)

// Calculate Edecay
float edecay_val = edecay(i_source, i_length)

// Plot
plot(edecay_val, "Edecay", color=color.yellow, linewidth=2)