The standard Bollinger Bands indicator is improved by integrating additional readings from the Standard Deviation indicator (StdDev), which are an additional filter for confirming trading signals. In addition, the indicator color of its lines indicates the beginning of the trend, its development and depletion. The indicator has a signal block that notifies the trader about the beginning of a trend on any timeframe to which it is connected.
- Type of messages-setting the notification method for the signal.
- Moving Average period-setting the feed period
- Shift of bars – shift of bars
- Moving Average deviation – the deviation of the tapes
- Type of price – setting up the type of prices
- Timeframe – setting the timeframe
- Accuracy of price-setting the accuracy of the readings
The trading signal is received at the time of the breakdown and closing of the price of the upper or lower band with the simultaneous opening of both bands of the indicator. If the upper band breaks through, it is considered that an upward movement begins, if the price closes below the lower band, this is evidence of the beginning of a downtrend. The narrowing of the upper band after opening in an uptrend indicates the beginning of the exhaustion of the impulse price movement. The growth of the upper band in a falling trend indicates the exhaustion of the impulse price movement after the opening of the bands. With a trend movement, there may be several accelerations and depletion of impulses. The most interesting moment to start trading is the period of trend change, and not its last fading in the fifth wave.
The indicator is a self-sufficient trading system. It is recommended to use it as a filter for trading signals in a software package consisting of the following products: