█ CONCEPT Acceleration Line (Blue) The Acceleration Line is calculated as the difference between the 8-period SMA and the 20-period SMA. This line helps to identify the momentum and potential turning points in the market.
Signal Line (Red) The Signal Line is an 8-period SMA of the Acceleration Line. This line smooths out the Acceleration Line to generate clearer signals.
Long-Term Average (Green) The Long-Term Average is a 200-period SMA of the Acceleration Line. This line provides a broader context of the market trend, helping to distinguish between long-term and short-term movements.
█ SIGNALS Buy Mode A buy signal occurs when the Acceleration Line crosses above the Signal Line while below the Long-Term Average. This indicates a potential bullish reversal in the market. When the Signal Line crosses the Acceleration Line above the Long-Term Average, consider placing a stop rather than reversing the position to protect gains from potential pullbacks.
Sell Mode A sell signal occurs when the Acceleration Line crosses below the Signal Line while above the Long-Term Average. This indicates a potential bearish reversal in the market. When the Signal Line crosses the Acceleration Line below the Long-Term Average, consider placing a stop rather than reversing the position to protect gains from potential pullbacks.
█ UTILITY This indicator is not recommended for standalone buy or sell signals. Instead, it is designed to identify market cycles and turning points, aiding in the decision-making process. Entry signals are most effective when they occur away from the Long-Term Average, as this helps to avoid sideways movements. Use larger timeframes, such as daily or weekly charts, for better accuracy and reliability of the signals.
█ CREDITS The idea for this indicator came from Fabio Figueiredo (Vlad).