ATR-Based Trend Envelopes with Smoothed Price Averages

Summary

This indicator description explains a trend-envelope approach that uses price movement to decide whether a trend has changed or remains in place. In the described variant, Average True Range (ATR) replaces a fixed percentage change as the basis for measuring price movement. Prices are smoothed before they enter the calculation, which can alter how responsive the resulting trend signals are.

The smoothing choice can be a simple, exponential, smoothed, or linear weighted moving average. The document does not specify the envelope formulas, ATR period, signal thresholds, or parameter settings, and it provides no examples, tests, or performance evidence. As a result, it outlines the indicator’s design but does not establish how well it works across instruments or market conditions. Users would need the full calculation details and independent testing to assess its behavior.

Key ideas

• The indicator uses ATR-based price movement to identify whether a trend changes or persists.
• It smooths prices before calculating the envelopes.
• Smoothing options include simple, exponential, smoothed, and linear weighted averages.
• The description omits formulas and test results, so it is insufficient to assess performance.

Tags

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