Acceleration Bands

Acceleration Bands

Description:
Acceleration Bands serve as a trading envelope that factor in an assets typical volatility over standard settings of 20 or 80 bars. They can be used across any time period, though traders prefer to use them most across weekly and monthly timeframes as breakout indicators outside these bands.

Using the shorter time frames can define likely support and resistance levels at the lower and upper Acceleration Bands.

Entry is usually made at the breakout point. Once the price closes back within the Acceleration Bands, this is taken as a signal that the acceleration period is over and it’s best to close out the trade.