hi friends
if you know the prices reverse from moderate extremes over 34 percent of time
or
if you know that prices reach extremes of price in 4 percent of time
would you waste time trading normal minor moves?
no- you wont.
Amibroker AFL Acceleration Bands - PowerYourInvestment.Com
--------------------------------------------
price headely suggests
opening up long positions when the Close happens above the upper band
whereas closing the long positions if price closes below the upper band.
for Short Sell trades he suggests opening a trade when it closes below
the lower band whereas covering the Short positions if price closes
above the lower band.
Prima facie it appears as if catching strong momentum is the main idea
behind this technique.
Acceleration Bands served as a trading envelope that factored in
stock/index’s volatility over a period of 20 days.
Acceleration Bands can be used across any time frame however
it works best on slightly higher time frames (Daily AND above).
Acceleration Bands –
Acceleration Bands was introduced by Price Headley in an effort to actively manage money in AND out of stocks which were going to perform well.
His main aim was to devise a technique where he could move money into the best performing stocks.
Acceleration Bands served as a trading envelope that factored in stock/index’s volatility over a period of 20 days.
Acceleration Bands can be used across any time frame however it works best on slightly higher time frames (Daily AND above).
Price Headley suggests that Acceleration Bands should be used on stocks which are showing the following characteristics for better results,
Stocks which belong to the Growth Industries
Stocks which exhibit High earnings growth
Stocks which have broken out to new highs over the past 50 days
Above mentioned points focus mainly on momentum.
In this case, momentum in earnings AND momentum in price action.
We feel this concept should also work well on High beta stocks AND on options as well.
This is something we will test in next post. Construction of Acceleration Bands is fairly simple.
Acceleration Bands are constructed by taking net directional movement (High-Low) of the asset each Day AND dividing it over average price of asset (High + Low divided by 2) to get percentage of directional movement for asset.
During trending phases, bands will expand whereas in non trending phases bands will contract.
Formula to construct the band is posted below,
Upper band=Average (H*(1+2*((2*(H-L)/(H+L)/2)*100)*.01),20)
Lower band= Average (L*(1-2*((2*(H-L)/(H+L)/2)*100)*.01),20)
Middle band=Average (C,20)
---------------------------------------------
Let me post one chart image
POINT IS ACC BANDS CAN BE USED FOR OPTION TRADING BECOZ ODDS STACK HIGH ON YOURSIDE
Buy call options only if strong uptrend begins-enter early is must.
acceleration bands help you find strong uptrend-momntum thrust area.
buying calls in moderate uptrend is not right. you can buy putcredit spreads
if you know the prices reverse from moderate extremes over 34 percent of time
or
if you know that prices reach extremes of price in 4 percent of time
would you waste time trading normal minor moves?
no- you wont.
Amibroker AFL Acceleration Bands - PowerYourInvestment.Com
--------------------------------------------
price headely suggests
opening up long positions when the Close happens above the upper band
whereas closing the long positions if price closes below the upper band.
for Short Sell trades he suggests opening a trade when it closes below
the lower band whereas covering the Short positions if price closes
above the lower band.
Prima facie it appears as if catching strong momentum is the main idea
behind this technique.
Acceleration Bands served as a trading envelope that factored in
stock/index’s volatility over a period of 20 days.
Acceleration Bands can be used across any time frame however
it works best on slightly higher time frames (Daily AND above).
Acceleration Bands –
Acceleration Bands was introduced by Price Headley in an effort to actively manage money in AND out of stocks which were going to perform well.
His main aim was to devise a technique where he could move money into the best performing stocks.
Acceleration Bands served as a trading envelope that factored in stock/index’s volatility over a period of 20 days.
Acceleration Bands can be used across any time frame however it works best on slightly higher time frames (Daily AND above).
Price Headley suggests that Acceleration Bands should be used on stocks which are showing the following characteristics for better results,
Stocks which belong to the Growth Industries
Stocks which exhibit High earnings growth
Stocks which have broken out to new highs over the past 50 days
Above mentioned points focus mainly on momentum.
In this case, momentum in earnings AND momentum in price action.
We feel this concept should also work well on High beta stocks AND on options as well.
This is something we will test in next post. Construction of Acceleration Bands is fairly simple.
Acceleration Bands are constructed by taking net directional movement (High-Low) of the asset each Day AND dividing it over average price of asset (High + Low divided by 2) to get percentage of directional movement for asset.
During trending phases, bands will expand whereas in non trending phases bands will contract.
Formula to construct the band is posted below,
Upper band=Average (H*(1+2*((2*(H-L)/(H+L)/2)*100)*.01),20)
Lower band= Average (L*(1-2*((2*(H-L)/(H+L)/2)*100)*.01),20)
Middle band=Average (C,20)
---------------------------------------------
Let me post one chart image
POINT IS ACC BANDS CAN BE USED FOR OPTION TRADING BECOZ ODDS STACK HIGH ON YOURSIDE
Buy call options only if strong uptrend begins-enter early is must.
acceleration bands help you find strong uptrend-momntum thrust area.
buying calls in moderate uptrend is not right. you can buy putcredit spreads
(Discuss) PRICE HEADELY develops acceleration bands to catch high momentum price moves
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