Acceleration Bands for Volatility and Trend-Continuation Signals

Summary

The document presents Acceleration Bands, an envelope-style indicator attributed to Price Headley. It derives an upper series from each bar’s high and a lower series from its low, adjusting both by a factor based on the bar’s high-low range relative to its midpoint. It then averages those series over 20 periods to form the displayed bands. The description says the indicator can be used across timeframes, gives 20 and 80 as typical periods, and considers it more effective for stocks.

The proposed interpretation is that wider bands reflect greater volatility and may accompany trend continuation; consecutive crossings above the upper band are described as buy signals. However, the document gives no chart examples, backtest, performance figures, exit rules, or risk controls. It does not substantiate the suggested relationship between band width and continuation, so the signal should be treated as a hypothesis requiring testing across instruments and market conditions.

Key ideas

• The indicator forms upper and lower envelopes from adjusted highs and lows.
• The example smooths both series over 20 periods.
• The description associates wider bands with greater volatility and possible continuation.
• Consecutive moves through the upper band are presented as a buy signal.
• No validation, exit method, or risk controls are provided.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.