Comparing the MSD with the MIDAS Displacement Channel

It's an issue that all admirers of band/channel/envelope indicators sooner or later face, namely how to avoid the charge that setting the multiplier will always be an arbitrary affair. This is an issue that faces Bollinger Bands, certain channel indicators, as well as envelope techniques such as the Moving Average Envelope. Indeed, an illustration of the failings of the latter with this precise point in mind was shown in Figure 14.8 in Chapter 14.

It's at this point that it's worth contrasting briefly the MSDBs with the MIDAS Displacement Channel (MDC), which was the subject of Chapter 14. The obvious difference between these two indicators is that the MDC fixes its outer boundaries meaningfully ...

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