I have a set of xy data and I want to find the outer bounds of this set so that when I plot the data and connect these outer bound points, all ther other points will be confined to these boundaries, as shown if figure.
You can try boundary(). There is a shrink factor input to determine how closely the boundary "hugs" the point set. The shrink factor is a scalar between 0 and 1. Setting s to 0 gives the convex hull, and setting s to 1 gives a compact boundary that envelops the points. The default shrink factor is 0.5.