AlphaTrend Uses Money Flow and ATR for a Trailing Trend Line

Summary

AlphaTrend is presented as a trend-following indicator derived from Trend Magic. Its line uses the Money Flow Index to choose a price anchor: below the low when money flow is at or above its midpoint, and above the high when it is below that level. An ATR-based offset, scaled by a coefficient, sets the distance. The line is constrained so it does not move backward against the current direction, and its color changes with the line’s slope.

The description associates the indicator with crossover signals, support and resistance, and trailing stops, and says it is less informative in sideways markets. It mentions a common period of 14 and coefficient of 1 as defaults. Although the prose also refers to CCI and RSI, the provided calculation uses MFI and ATR; it does not show how crossover signals are generated or provide backtests, risk comparisons, or evidence that losses are reduced. Treat its stated benefits as claims to evaluate on the intended market and timeframe.

Key ideas

• The indicator combines Money Flow Index direction with an ATR-scaled price offset.
• Its line is held at the prior value when a new value would reverse against the prevailing direction.
• The line is colored according to whether it is rising or falling.
• The description proposes using the line as a trend reference, support or resistance, and a trailing stop.
• The document warns that the indicator may be uninformative in sideways markets and supplies no performance tests.

Tags

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