Adaptive Price Zones Built from Moving Averages of Price and Range

Summary

The Adaptive Price Zone is a price channel built from two moving-average calculations. One moving average is applied to a configurable price series, and a second is applied to the bar range, defined as the high minus the low. A width setting scales the range average; adding and subtracting that scaled value from the price average produces the upper and lower channel boundaries. The user can configure the calculation period, applied price, averaging method, and channel width.

The document identifies the indicator with a published description by Lee Leibfarth in 2006, but gives no entry or exit rules, market examples, or performance evidence. It explains how the channel is calculated, rather than how to trade it or how its parameters should be selected. Since the channel’s behavior depends on the chosen averaging method, input price, period, and width, the note alone does not establish whether it is suited to trend following, mean reversion, or a particular market. Traders would need to assess those choices and test any strategy built around the channel independently.

Key ideas

• The channel center is a moving average of a configurable applied price.
• Channel width is based on a moving average of each bar’s high-low range.
• The width parameter scales the range average above and below the price average.
• Period, applied price, averaging method, and width are configurable.
• The document explains the formula but does not provide trading rules or performance evidence.

Tags

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