Description:
Acceleration Bands is a momentum indicator that consists of three bands: an upper band, a lower band, and a midpoint. The midpoint is a simple moving average (SMA), typically calculated over a specified period, such as 20 days. The upper and lower bands are derived from the high and low prices of a financial instrument during the same period.
Input Parameters:
- Length: Number of periods used in the calculation.
- Offset: The offset value is used to access the data of any candle or indicator with reference to the current candle, to access the current candle data we will use the offset value of "0", to access previous candle data "-1" offset value will be used.
Use Cases:
- When the price breaks out of the top band, this is considered to be accelerating and can be considered a bullish move. Once price falls back into the shaded region, this can be taken as a signal to exit a long position.
- When the price breaks below the bottom band, this is considered to be accelerating and can be considered a bearish move. One price falls back into the shaded regions, this can be taken as a signal to exit your short position.
- When the price is above the midpoint, it indicates bullish momentum. Conversely, when price is below the midpoint, it indicates bearish momentum.
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May 17, 2024