Forex ; Acceleration Bands

Acceleration Bands
Breakout outside Acceleration bands suggest a beginning of a strong rally or a sell-off.
Closing inside the bands afterward signals about the end of a rally or a sell-off.
Details
The idea behind Acceleration Bands indicator
Acceleration Bands principal use is in finding the acceleration in currency pair price and benefit as long as this acceleration preserves.
How to interpret Acceleration bands indicator
Acceleration bands are set as an envelope around a 20 period simple moving average on equal distance from it. Headley, the inventor of Acceleration Bands indicator suggests using them on weekly and monthly time frames to determine price acceleration breakouts (breakouts outside the bands).
When Acceleration Bands are used for smaller time frames, upper and lower bands are treated as levels of possible support and resistance.
How to trade with AB indicator
2 consecutive closes outside Acceleration Bands suggest an entry point in the direction of the breakout. Then position is kept till the first close back inside the Bands.
Acceleration Bands indicator on the chart


The formula for Acceleration Bands
Upperband = ( High * ( 1 + 2 * (((( High - Low )/(( High + Low ) / 2 )) * 1000 ) * Factor )));
Lowerband = ( Low * ( 1 - 2 * (((( High - Low )/(( High + Low ) / 2 )) * 1000 ) * Factor )));
Factor=0.001

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Forex ; Acceleration Bands 2009-08-30T09:26:00-07:00 Rating: 4.5 Diposkan Oleh: admin