Moving Average Channel (MAC)

Name Type Prerequisite Use Cases
Moving Average Channel (MAC) Trend SMA Identifying the "trading range" of a specific trend.

Definition

Uses the High and Low prices for the averages to create a price "envelope."

Mathematical Equation

\[ Upper = SMA(H, n), Lower = SMA(L, n) \]

Special cases

  • Maximum possible value: Unbounded
  • Minimum possible value: 0
  • Behavior: Follows the price, creating bounds around a central moving average.

Visualization

Moving Average Channel (MAC)

Trading Significance

  • Category: Trend

  • Use Case: Identifying the "trading range" of a specific trend.