A few days ago, I wrote about Acceleration Bands in my post titled “Acceleration Bands Trading Secrets for Options.” In that post, I discussed how Price Headley, the founder of BigTrends, developed Acceleration Bands and the Big Trends Toolkit for Metastock, which includes built-in experts and explorations.
Big Trends Toolkit – Acceleration Bands Trading System
The main goal of Acceleration Bands is to identify extreme price movements and catch rare 5% moves when the price of a scrip really accelerates. During these times, prices move away from the moving averages and the world’s most furious moves actually happen outside of the acceleration band. In my previous post on Acceleration Bands, I shared the Amibroker AFL for the acceleration band with my readers. Now, let’s develop a trading system out of that.
To generate a buy signal, we need two consecutive bars outside of the acceleration band. The Amibroker code for the buy logic is straightforward:
Buy = C > Upper band AND Ref(C, -1) > Upper band AND NOT Ref(C, -2) > Upper band;
I also added the sell, short, and cover logic as per Price Headley’s Big Trends Toolkit Metastock formula. After that, I applied the chart on my Amibroker to load the Acceleration Bands Trading System in my Amibroker exactly as the Big Trends Toolkit.
Combining Acceleration Bands with William Percentage R
Price Headley scanned the breakouts using Acceleration Bands and then waited for a pullback with the William Percentage R. He named the trading system the Percent R Retest System. He created a special type of Percent R by using a 30-period William Percentage R increased by 100. Once the breakout happens in acceleration bands, we need to start watching the scrips.
To generate a buy signal, wait for the Percent R to go above 80 and then retest below 80. For a short sell signal, wait for the Percent R to go below 20 and then retest above 20. You can see the above image for reference. You can trade options with good accuracy using this method. If you have some coding knowledge, you can also develop a full trading system with explorations in Amibroker.
Trading Options with Accuracy with Big Trends Toolkit
Using the Acceleration Bands and William Percentage R system, you can trade options with accuracy. To trade options, use the signals generated by the system to buy or sell options. This method has shown good accuracy in predicting price movements.
Conclusion
In conclusion, the Acceleration Bands and William Percentage R system is an effective method for trading options. By combining these two indicators, you can generate accurate buy and sell signals. If you have coding knowledge, you can develop a full trading system with explorations in Amibroker. So, try out this trading system and see how it can improve your trading performance.
