VDUB BB %B REVERSAL_v4.3

The VDUB BB %B REVERSAL_v4.3 indicator provides a comprehensive oscillator based on the Bollinger Bands %B calculation, designed to identify potential trend reversals and momentum shifts. By normalizing price action relative to Bollinger Bands, this tool helps traders visualize overbought and oversold conditions alongside divergence signals.

Usage

The indicator primarily functions as a bounded oscillator, oscillating around a zero line. Values above 50 typically indicate overbought conditions, while values below -50 suggest oversold conditions.

• Reversal Identification: Traders look for the oscillator to cross specific thresholds or change direction after reaching extremes to identify potential entry or exit points.
• Divergence Signals: The script can plot both regular and hidden divergences. Regular divergences often signal a trend reversal, while hidden divergences can suggest trend continuation.
• Market Sessions: The tool includes an optional overlay to highlight Asian, European, and New York sessions, allowing users to see how price behavior changes across different liquidity periods.
• Binary Options: For short-term traders, the script includes a dedicated expiry marker system based on a multiplier of the current timeframe to track trade duration.

Details

The script utilizes the Bollinger Band %B formula: (Price - Lower Band) / (Upper Band - Lower Band). This value is then shifted so that 0 represents the middle basis line.

To enhance signal reliability, the script incorporates fractal-based divergence detection. It compares price pivots against oscillator pivots to find discrepancies. A "Divergence Channel" is also calculated using a standard deviation factor, providing a visual boundary for the divergence points plotted on the oscillator.

Settings

Bollinger Bands

• Bollinger Band Length: The lookback period used for the SMA and Standard Deviation calculations.
• Bollinger Band StdDev: The multiplier for the bands' width.
• Bollinger Band Source: The price input used for calculations (default is Close).

Visuals

• Color Code Bars: When enabled, this changes the chart's candle colors based on whether the %B value is positive or negative.
• Show Coloured Exchange Sessions: Toggles background highlighting for different global market hours.
• Asia/Europe/New York Session Time: Customizable input strings to define the start and end times for each session.

Divergence

• Show Divergence Channel: Enables the visual boundaries for divergence detection.
• Divergence Channel Width Factor (Stddev): Adjusts the offset of the divergence markers from the oscillator line.
• Show Regular/Hidden Divergence: Toggles the specific types of divergence labels on the oscillator.

Binary Options

• Show Binary Option Markers: Enables visual background blocks to track trade expiry.
• Multiplier for BO Expiry: Sets the duration of the expiry highlight relative to the current chart timeframe.

FAQ

How do I use the VDUB BB %B REVERSAL_v4.3 for trend following?

While primarily a reversal tool, you can use the "Hidden Divergence" feature. Hidden bullish divergence (higher low in price, lower low in oscillator) often signals that the current uptrend is likely to continue.

What do the colored background zones represent?

These represent the major trading sessions (Asia, Europe, NY). This helps traders identify periods of high volatility or specific session-based price patterns.

How can I access VDUB BB %B REVERSAL_v4.3?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.