Bollinger Bands %b & RSI & Stochastic Smoothed Indicator & Alert

The Bollinger Bands %b & RSI & Stochastic Smoothed Indicator & Alert tool combines three popular oscillators into a single normalized view to identify potential trade opportunities and overbought/oversold conditions. It aims to provide high-probability signals by ensuring that price movements are confirmed across Bollinger Band width, Relative Strength Index (RSI), and smoothed Stochastic levels.

Usage

The indicator can be used to identify potential market reversals in both Cryptocurrency and Forex markets, particularly on shorter timeframes.

• Buy Signals: Occur when the RSI is below the oversold level, the price is below the lower Bollinger Band, and specific price action requirements are met.
• Sell Signals: Occur when the price is above the upper Bollinger Band and meets either RSI-based or Stochastic-based overbought criteria, depending on the user's settings.
• Normalization: Both the Bollinger Bands %b and the Stochastic are normalized to fit within the RSI's scale (typically 0-100), allowing for direct comparison of different momentum oscillators on a single pane.

Details

The script executes several normalization steps to ensure all three metrics are visually compatible:

• BB %b Normalization: The standard 0-1 range of the Bollinger Band %b is re-scaled to align with the RSI's overbought and oversold levels.
• Stochastic Smoothing: The Stochastic oscillator is smoothed using a Simple Moving Average (SMA) and then normalized to the RSI pane.
• Conditional Logic: The buy signal is focused on price action and RSI, while the sell signal logic adapts based on whether the Stochastic feature is toggled on or off.

Settings

Bollinger Bands

• BB Period: Sets the lookback period for the Bollinger Band basis (SMA).
• BB Multiplier: Adjusts the standard deviation multiplier for the width of the bands.

RSI

• RSI Period: The lookback period for the Relative Strength Index.
• RSI Overbought: The upper threshold for RSI signals (default is 70).
• RSI Oversold: The lower threshold for RSI signals (default is 30).

Stochastic

• Use Stochastic Smoothed: Toggles the inclusion of the Stochastic oscillator and its influence on sell signals.
• Stoch Period: The lookback period for the Stochastic calculation.
• Stoch Overbought: The threshold for overbought Stochastic levels.
• Stoch Smoothing: The SMA period used to smooth the Stochastic line.

Visuals & Source

• Source: The price data point used for calculations (default is Close).
• Draw Buy/Sell Arrow: Toggles the visibility of the "▲ BUY" and "▼ SELL" labels on the indicator pane.

FAQ

How do I use the Bollinger Bands %b & RSI & Stochastic Smoothed Indicator & Alert?

You can use it to spot confluence between price extremes (Bollinger Bands) and momentum extremes (RSI/Stoch). When all lines reach the outer bands simultaneously, it often indicates a potential reversal.

Does this indicator work on all timeframes?

While the script is optimized for shorter timeframes (under 60 minutes) for crypto and forex, the parameters can be adjusted to suit higher timeframes as well.

How can I access this script?

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