Smooth ATR Trend Envelopes with Smoothed Price Averages

Summary

This brief description explains a trend-envelope indicator that uses percentage price movement to decide whether a trend has changed or remains intact. In the described variant, smooth average true range replaces the percentage-change calculation, while prices are smoothed before the trend calculation.

Price smoothing can use a simple, exponential, smoothed, or linear weighted moving average. The document gives no parameter settings, formulas, examples, market tests, or performance results, so it explains the indicator’s construction at a high level without showing how reliably it identifies trends or how it should be traded.

Key ideas

• The envelope indicator uses price movement to determine whether a trend changes or continues.
• This variant uses smooth ATR to calculate the price-change threshold.
• Prices are smoothed before the trend calculation using one of four moving-average types.
• The description provides no settings or empirical evidence about signal quality.

Tags

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