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Saturday
Mar242012

Acceleration Bands

Acceleration Bands

Prodigio Description:
Calculates the Acceleration Bands study.
 
 
Further Explanation:
Acceleration Bands are based on the average trading range for each day. Acceleration Bands are plotted around a simple moving average as the midpoint, and the upper and lower bands are calculated based on high and low prices.

Points of intersection with price tend to indicate the trend end or reversal.
The Acceleration Bands indicator created by Price Headley serve as a trading envelope that factor in a stock's typical volatility over standard settings of 20 or 80 bars. These bands tend to be a bit wider than Bollinger bands which makes it even more significant when a stock breaks out above them. The author uses the 20-day bands as a general rule. See his book "Big Trends in Trading: Strategies to Master Major Market Moves (A Marketplace Book)".
 
formula for Upper Band:
(H*(1+2*((((H-L)/((H+L)/2))*1000)*0.001))) 
where H is the highest price reached and L is the lowest
.
formula for Lower Band:
 (L*(1-2*((((H-L)/((H+L)/2))*1000)*0.001))) 
where H is the highest price reached and L is the lowest.

Read more: 
http://www.bigtrends.com/accelerationbands.pdf


Example:
Finds where price is above the upper 20 day Acceleration Band.

  Downoad .Wiz file

 

   See more: Discussions & Examples

 

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