Stepped Moving Average Channel (SMAC)

The Stepped Moving Average Channel (SMAC) tool provides a specialized visualization of price action through a stepped moving average channel of high and low prices, designed to help traders identify precise entry and exit levels for swing trades or options strategies. By applying a stepping mechanism to highly responsive moving averages, the script filters market noise and aligns price levels with psychological round numbers.

Usage

The SMAC tool can be used to plan trades with predefined profit targets or risk levels. For example, a trader aiming for a 2% gain can configure the percentage envelope to 2% and visualize exactly where price must reach to hit that target. It is best used in conjunction with momentum indicators or trend confirmation tools to validate the direction before using the SMAC levels for execution.

The indicator offers three primary visualization components:

• The Channel: Built from the moving averages of High and Low prices, creating a dynamic support/resistance zone.
• Stepping: Prices are rounded to specific "steps" (either automatically based on price/timeframe or manually) to create a staircase effect that mimics mental price plateaus.
• Envelopes: Users can enable either Percentage-based or ATR-based envelopes to set volatility-adjusted targets or stop-loss levels outside the main channel.

Details

The script utilizes the Compound Ratio Moving Average (CoRA_Wave), a proprietary calculation known for its high responsiveness and smoothness. This MA tracks price more closely than a standard SMA or EMA, reducing lag in the channel borders.

The "Stepping" logic functions by taking the MA values and rounding them to the nearest increment. This is designed to "snap" the indicator to significant price levels, reducing the visual clutter of minor fluctuations. The Auto-Stepping feature dynamically calculates the optimal step size by checking the underlying asset price and the current chart timeframe (e.g., doubling the step for Weekly charts or reducing it for Intraday charts).

Settings

• Length: Sets the lookback period for the core moving average calculation.
• Extra Smoothing: Applies additional WMA smoothing to the channel borders for a cleaner look.
• Step Size [0 = Auto]: Defines the increment for the stepping effect. Setting this to 0 enables the automatic calculation based on timeframe and price.
• Step Calculation:
  • Round up/down: Rounds to the nearest step (e.g., 17 with a step of 10 becomes 20).
  • Whole Step: Only rounds to completed steps (e.g., 17 with a step of 10 becomes 10).
• Pct Envelope %: Sets the distance of the outer envelopes based on a fixed percentage of the channel price.
• ATR Envelope ATR Multi: Sets the distance of the outer envelopes based on the Average True Range (ATR) to account for current market volatility.

FAQ

How does the Auto-Step feature decide on the step size? The script looks at the current price of the asset and assigns a base step (e.g., 1.00 for prices under 100). It then multiplies or divides that step based on your timeframe—increasing it for Weekly/Monthly views and decreasing it for lower intraday timeframes.

Can I use this indicator for automated alerts? Yes, the script includes built-in alert conditions for price crossing the Upper/Lower borders of the channel as well as crossovers of the Percentage Envelopes.

How do I get access to the Stepped Moving Average Channel (SMAC)? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.