Nov 15, 2022
1 mins read
maxPaths which stands for Moving Average Crossover Paths (hence maxPaths) is very informative trend following formatting that can be applied to a chart template due to its "Path" being a set of moving averages in their own right, one each for the average of the High prices and one for the Low prices.
So straight off the bat when introduced to maxPaths the main thing that resonated was that the use of paths really emphasises the Higher Highs and Higher Lows (uptrending) or Lower Highs and Lower Lows (downtrending).
Taking the below example of (ASX:ALC) - Alcidion Group and focusing in on the lighter orange maxPaths (which are a slower 60 period timeframe), we can see:
price above the maxPath from approximately early November 2020 through to early July 2021 (the period showing the "blue skies" shading as things were on the up)
price trying to go sideways (although really showing a slight falling away over that period) through July 2021 to November 2021 indicated by a change in slope of the orange maxPath
a sustained sell off from December 2021 through July 2022 (the period showing distinct "white space" below a falling orange maxPath itself)
So rather than simply having a single longer term trend line for 60 periods, having the set of lines for both High and Low price trends provides a greater level of information about how strong or weak price movements are in context to the underlying longer term (60 period in this example).
further explanations and examples continue in an extended Supporter and Member version of this post