Projection Bands

A plain Donchian-style channel (highest high / lowest low over N bars) is always flat-topped and flat-bottomed within its window, which means it lags visibly the moment price starts trending - the band only catches up once the trend has already pushed a new extreme into the window. Projection Bands, published by Mark Widner, fix this by fitting a regression line to the highs and a separate one to the lows over the same window, then projecting every individual high and low in that window forward in time, along its own line's slope, to where it would sit "now" if the trend had continued from that bar. The upper band takes the highest of those forward-projected highs; the lower band the lowest of the forward-projected lows. The effect is a channel that tilts with the regression trend rather than one that is recomputed as two flat numbers every bar - during a clean trend the band visibly slopes instead of stair-stepping, and it still functions as a genuine envelope because it is built from real projected extremes, not simply the regression line offset by a fixed amount. Notes and limitations - Both regressions are refitted independently from scratch on every bar over a fixed window - there is no smoothing or memory between bars beyond what the shared window naturally provides, so the bands can still jump noticeably when a large high or low bar enters or leaves the window. - Purely a visual channel; it does not draw entry/exit arrows, alert on a breakout, or classify trend strength on its own. - On a very short lookback (below roughly 5-6 bars) the regression becomes sensitive to individual bar noise and the bands can widen and narrow abruptly - a longer InpPeriod is recommended for anything used to gauge trend rather than raw noise.

Indicator · MT4 · v1.0 · Free

Tags: Channels & Envelopes · Trend · MT4 Indicator · MQL4 Source Code

MetaTrader 4 & 5 indicators · PolyMaria