The Acceleration Bands indicator measures a security's volatility by plotting an upper and lower band around its moving average. The indicator dynamically adjusts the width of the bands based on the security's volatility. As such, during periods of increased volatility, the bands move further apart; during periods of decreased volatility, they move closer together. By doing so, Acceleration Bands may help traders identify potential trend reversals and make better informed trading decisions.
The following parameters can be adjusted based on the individual trader's preferences and risk tolerance:
Period: The number of periods used to calculate the moving average.
Color: The color of the bands and moving average line.
Acceleration Bands on Chart
*For illustrative purposes only. Not a recommendation of a specific security or investment strategy.