Last updated
Last updated
Bollinger Bands are a plot of three trend lines consisting of a simple moving average (SMA) of the asset price, and an upper and lower band. Typically, the upper and lower bands are plotted two standard deviations above and below the SMA.
When price approaches the boundary of the upper band, an asset is often considered ‘overbought’. When price approaches the lower boundary, an asset is often considered ‘oversold’.
In periods of low volatility, Bollinger Bands contract. This is often considered a sign that volatility will soon increase, which may present trading opportunities.
Conversely, when volatility is high, Bollinger Bands will expand. When bands are wide apart, it may indicate a decrease in volatility is imminent and may indicate a good time to exit a trade.
It is important to note, Bollinger Bands do not indicate when a change in volatility will occur or which direction the price could move.
Specifies the price source used to calculate the Bollinger Bands:
Open - open price
High - highest price
Low - lowest price
Close - closing price
Hl2 - average of high + low price (H+L/2)
Hlc3 - average of high + low + close price (H+L+C/3)
Ohlc4 - average of open + high + low + close price (O+H+L+C/4)
Hlcc4 - average of high + low + double-weighted close (H+L+C+C/4)
Specifies the amount of smoothing applied to the Bollinger calculation. Higher values will make the algorithm less sensitive to fluctuations in price.
When selected, Bollinger confluence will only activate if a cross occurs in a trend whose direction matches the parent algorithm.
Elements of other loaded indicators can also be set as a Source. This allows the use of Lendal Visualizers as factors.
Specifies the higher timeframe for analysis of Bollinger price action. If a value other than ‘chart’ is set, this will override the setting in the section.
The Higher Timeframe trailer analyzes macro trends over 1000 candles at the resolution of the current timeframe in TradingView. The maximum lookback period must be considered when selecting a Higher Timeframe. See the section for details.
Specifies the number of adjacent candles that will be impacted by . Higher values will increase the smoothing effect and make the algorithm less sensitive to fluctuations in price.
Specifies if and will be adjusted manually or set to a short, medium, or long-term preset.
Specifies the number of lookback periods used to calculate the .
Sets the standard deviation used to calculate trend direction. Generally, Price Std. Deviation (sd) should be increased as (p) is increased. e.g. p = 10, sd = 1.9; p = 20, sd = 2; p = 50, sd = 2.1. However, these settings may not suit some assets.
Specifies the minimum volatility required for the algorithm to fire signals. Higher values will reduce the sensitivity of the algorithm to price fluctuations making signals less frequent, but more reliable. This may prove useful in choppy market conditions. Volatility detection based on the width of the Bollinger Band technical indicator can also be activated as a global function in the section. Global volatility detection operates independently of volatility settings within individual factions.
When selected, the algorithm will check for confluence with the setting of Rangers before firing a signal.
The Price Action (Bollinger) algorithm determines trend direction with calculations based on the Bollinger Bands technical indicator.
