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Adjustable Trading Bands
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| Added: December 04, 2006 |
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| Tags:
MetaStock, indicator
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Using the default values used in the formulas, I have found that theseupper and
lower bands provide effective risk control while trading. The upper band can be
used as the extreme point to get rid of shortsand viceversa. In fact, prices tend
to remain above both the bands while the market is in a strong uptrend, and prices
remain below thebands in a downtrend. During short-term range-bound markets, they
tend move between the bands. I have found this idea in TusharChande's"New
Technical Trader". Since you have studied ATR so thoroughly, it would be
be very nice if you could comment on them.Canbe made into a template for easier
usage.
from Rajat K Bose
Code:
Adjustable Trading Bands
{Upper Band}
Prd1a:=Input("ATR Period",5,20,5);
Prd2a:=Input("Period for Highest High Value",5,20,10);
(HHV(LLV(L,Prd1a)+ATR(Prd1a),Prd2a));
{Lower Band}
Prd2b:=Input("Period for Lowest Low Value",5,20,10);
(LLV(HHV(H,Prd1a)-ATR(Prd1a),Prd2b));
Author: Tushar Chande
Source: http://www.guppytraders.com
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