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