Bollinger bands/Lagging span cross

The Bollinger bands/Lagging span cross indicator identifies potential trend breakout and reversal signals by detecting intersections between the lagging span (Chikou Span) and Bollinger Bands.

Usage

The Bollinger bands/Lagging span cross is used to spot momentum shifts and trend continuations. By projecting the current price back by a fixed displacement (26 periods), the lagging span provides a historical context for current price action relative to previous volatility levels.

• Bullish Signal (B): Occurs when the lagging span crosses above the upper Bollinger Band from 26 periods ago. This suggests a breakout or a surge in bullish momentum.
• Bearish Signal (S): Occurs when the lagging span crosses below the lower Bollinger Band from 26 periods ago. This indicates a breakdown or increasing bearish pressure.

Traders typically use these signals to confirm the strength of a trend or to identify potential exit points when the price momentum fails to sustain its position relative to historical volatility bands.

Details

The concept behind this tool was popularized by the trader Robbytrade. It merges two popular technical analysis concepts: the volatility bands of the Bollinger Bands and the time-shifted perspective of the Ichimoku Kinko Hyo's Lagging Span (Chikou Span).

The script calculates standard Bollinger Bands (SMA basis and standard deviation-based bands) and then checks for crossovers between the current source price and the Bollinger Bands' values as they existed 26 periods ago. The visual plots are offset to align these crosses with the lagging span's position on the chart.

Settings

• Source: The price data used for both the Bollinger Band calculations and the lagging span (default is Close).
• BB length: The lookback period for the Simple Moving Average (basis) of the Bollinger Bands.
• BB mult: The standard deviation multiplier that determines the width of the Bollinger Bands.

FAQ

How do I interpret the offset signals?

The signals are plotted with a negative offset of 26 periods to align with the lagging span. This means the signal appears 26 bars behind the current price, reflecting where the crossover occurred in historical terms.

Can I change the displacement period?

In this specific version, the displacement is fixed at 26 periods to remain consistent with standard Ichimoku Lagging Span settings, though the Bollinger Band parameters themselves are fully adjustable.

How can I access this indicator?

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