Volatility Adjusted Moving Average

This technique modifies a moving average band by a multiple of ATR. When price moves beyond the adjusted band, it indicates an accelerated trend.

Testing indicates an average annual return of about 160%. It performs best in the forex market.

Long trades are opened above the upper band, shorts below the lower band. A cross back through the baseline moving average closes the position.

Because the bands expand with volatility, stops adapt to market conditions.

Details

• Entry Criteria: Price breaks above or below MA ± ATR multiplier.
• Long/Short: Both directions.
• Exit Criteria: Price crosses MA or stop.
• Stops: Yes.
• Default Values:
  • MAPeriod = 20
  • ATRPeriod = 14
  • ATRMultiplier = 2.0m
  • CandleType = TimeSpan.FromMinutes(5)
• Filters:
  • Category: Trend
  • Direction: Both
  • Indicators: MA, ATR
  • Stops: Yes
  • Complexity: Intermediate
  • Timeframe: Intraday
  • Seasonality: No
  • Neural Networks: No
  • Divergence: No
  • Risk Level: Medium