Day Trading & Forex Forum

kvhutch

Hi. I've been reading Price Headley's 'Big Trends in Trading' in which he proposes an indicator - Acceleration Bands. He gives the Tradestation code for the indicator, which basically translates to:

Upperband = ( High * ( 1 + 2 * (((( High - Low )/(( High + Low ) / 2 )) * 1000 ) * Factor )));

Lowerband = ( Low * ( 1 - 2 * (((( High - Low )/(( High + Low ) / 2 )) * 1000 ) * Factor )));

Not being very mathematical (and I'm sure this makes sense to someone), I can't understand the parts in the first parts of the formula, i.e. 1 + 2 (for Upperband) and 1 - 2 (for Lowerband). Simple maths, I'm sure, but why not use 3 (1 + 2 in Upperband) and -2 (1 - 2 in Lowerband)? I know I'm missing something here and I'd be grateful if someone can point me in the right direction.

For those interested, the Tradestation code is:

UpperBand:
Average((high*(1+2 * ((((high-low) / ((high+low) / 2)) * 1000) *. 0001))), 20)

LowerBand:
Average((low*(1-2 * ((((high-low) / ((high+low) / 2)) * 1000) *. 0001))), 20)




Cheers

TheBramble

It's all to do with the mathematical concepts of commutivity and associativity.

The '2' is a multiplicand of the next order parenthetical statement.

Basically, the "2 *" operates on the result of the computation inside the parentheses BEFORE the "1+" or "1-" is applied.

FetteredChinos

brambs have you been on the meths again today?

TheBramble

Will you stop stalking me.

I've told you "No". My Mentorship Programme is full....

kvhutch

brambs, when I grow up I want to speak just like you. But yes, I get it. Many Thanks for your swift and excellent reply.

Cheers

TheBramble

You're welcome.

When (if) I grow up I want to know what the hell to do with Acceleration Bands.

Salty Gibbon

You really want to know ?

RobV

Note: factor should be 0.001 rather than 0.0001