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From the book "Big Trends in Trading" by Price
Headley.
Basically I am taking the net directional movement each day (high - low)
and dividing it over the average price of the stock (high + low divided
by 2) to get a percentage of directional movement for the stock.
When the stock is non-trending these bands will contract, while the bands
will tend to expand when the stock is trending.
1. Usually I am looking at the last 20 bars on the Acceleration
Bands. On a daily chart, this incorporates roughly the last months
trading activity, while on a weekly chart this covers 4-1/2 months, and
on a monthly chart just over 1-1/2 years of price action.
2. The upper and lower Acceleration Bands are plotted equidistant
from the simple moving average. A daily chart shows a 20-day moving
average, and a weekly chart plots a 20-week moving average.
3. Acceleration Bands adjust for a stock's volatility. The
more volatile the stock's price action over the last 20 periods, the
wider the bands will be around the moving average.
4. Once I see two consecutive closes above the upper Acceleration
Band I get a buy signal. On trending stocks, this will often lead
to a major upside Acceleration move; on choppy trading range stocks, this
will often be a headfake. I use historical data which I share with
subscribers to show which stocks have performed the best (and the worst)
based on several entry and exit rules.
5. One close back into the Acceleration Band signals a traditional
exit of the trade, as the Acceleration period is now likely to
end.
Headley's web site is:
http://www.bigtrends.com/
HHP
=========================
At 01:50 AM 6/20/2004, you wrote:
Can you describe how these bands
are intended to be used?
Thanks,
Steve
----- Original Message -----
From: HarveyHP
To:
amibroker@xxxxxxxxxxxxxxx
Sent: Sunday, June 20, 2004 2:53 AM
Subject: Re: [amibroker] Acceleration Bands
/* Headley - Acceleration Vands */
MidPt = MA( C, 20 );
AccUp = MA( ( H * ( 1 + 2 * ( ( ( ( H - L ) / ( ( H + L ) / 2 ) ) * 1000 ) * .001 ) ) ) , 20 );
AccDn = MA( ( L * ( 1 - 2 * ( ( ( ( H - L ) / ( ( H + L ) / 2 ) ) * 1000 ) * .001 ) ) ) , 20 );
Plot( C, "", colorBlack, styleCandle );
Plot( MidPt, "", colorBrown, styleDots );
Plot( AccUp, "", colorBrown, styleLine );
Plot( AccDn, "", colorBrown, styleLine );
Title = EncodeColor( colorBrown ) + "Headely - Acceleration Bands";
======================================================
At 05:17 PM 6/19/2004, you wrote:
Has anyone heard of Acceleration Bands? Does anyone have a code for
this indicator? Thanks.
Ed
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