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