Building an ATR Trend Cloud with a Trailing Stop

Summary

The document describes a two-part trend indicator that plots a cloud between a 75-period exponential moving average and an ATR-based trailing stop. The stop component uses a 14-period average true range and a fixed offset to form upper and lower candidate levels. Its trend state switches when price crosses the prior level; the active stop is carried forward under specified conditions and reset when the trend changes. The main indicator then displays the higher and lower of the moving average and trailing stop as the cloud boundaries.

The source presents the construction and its required components but does not provide chart examples, parameter rationale, trading rules, or backtest evidence. It also does not explain how to interpret cloud changes as entries or exits, so the indicator alone should not be treated as a complete strategy. The accompanying privacy notice is administrative and adds no trading guidance.

Key ideas

• The indicator combines an exponential moving average with an ATR-based trailing stop.
• The trailing stop tracks a trend state that changes when price crosses a prior threshold.
• The cloud boundaries are formed from the higher and lower values of the moving average and stop.
• The document gives no performance evidence or complete entry and exit rules.

Tags

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