MATY Parallel Bands for Trend Entries and Exits
Summary
The document describes a trend-following indicator built from a moving average of the prior day’s typical price. It plots five fixed-distance bands above and below that average; the user sets the period and band increment, with 20 periods and an increment of 10 given as typical settings for the DAX. A long entry occurs when price crosses above the average, while a short entry uses the inverse condition.
The companion histogram assigns price to levels relative to the average and bands. It tracks the highest or lowest level during a consecutive run on one side, then signals an exit after a retracement of two levels (conservative) or three (more aggressive). The document says the method suits trending charts rather than sideways markets and provides indicator logic, but no backtest, performance evidence, or transaction-cost analysis. Band spacing is fixed, so the stated increment may require adjustment across instruments and market conditions.
Key ideas
- The MATY is a moving average of the previous day’s typical price.
- Five fixed-distance bands on each side of MATY classify price position.
- The entry rule buys above MATY and sells short below it.
- A retracement of two or three band levels signals a possible exit.
- The author recommends the indicator for trending markets and cautions against lateral markets.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.