Using Headley’s Acceleration Bands to Identify Breakouts

Summary

This document introduces Price Headley’s Acceleration Bands as a volatility-based indicator intended to identify a move as it begins to trend. The bands are calculated over a user-selected number of bars, with a simple moving average as the midpoint and upper and lower boundaries set an equal distance from it. The description compares the layout to Bollinger Bands and notes that a 20-bar period is often used by default.

The trading interpretation provided is that a price break above the upper band may indicate an upside breakout and serve as a buy signal. The text frames the indicator as applicable to stocks and other assets with chart data, but does not explain a corresponding lower-band exit or short signal. It gives no formula for band distance, confirmation rules, stop placement, backtest, or performance statistics. As presented, the method is a basic breakout idea whose parameters and reliability remain unevaluated.

Key ideas

• Acceleration Bands use a moving average midpoint and volatility-based outer bands.
• The calculation uses a user-defined lookback period, often set to 20 bars.
• A move above the upper band is presented as a possible buy signal.
• The document does not specify exit rules, parameter tests, or performance evidence.

Tags

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