Bollinger Bands Plus

The Bollinger Bands Plus indicator provides a versatile implementation of the classic Bollinger Bands volatility envelope, allowing users to choose from a wide variety of moving average types for the basis line. This tool enables traders to customize the responsiveness and smoothing of the bands to better fit different market conditions and asset classes.

Usage

The Bollinger Bands Plus can be used to identify potential overbought/oversold conditions, volatility breakouts, and trend direction. By selecting different Moving Average (MA) types, users can modify how the indicator reacts to price action:

• Mean Reversion: Users can look for price rejections at the upper or lower bands.
• Volatility Breakouts: Wide bands indicate high volatility, while narrow bands (squeezes) often precede significant price movements.
• Trend Following: The basis line is color-coded to represent the current trend (Uptrend, Downtrend, or Consolidation) based on the relationship between the MA slope and price position.

Details

This script enhances the standard Bollinger Bands formula by replacing the traditional Simple Moving Average (SMA) with eleven different MA options. The calculation for the bands remains consistent with the standard formula:

• Basis: The selected Moving Average.
• Upper Band: Basis + (Standard Deviation * Multiplier).
• Lower Band: Basis - (Standard Deviation * Multiplier).

The included MA types are:

• SMA/EMA/WMA: Standard smoothing techniques.
• VWMA: Volume-Weighted Moving Average for volume-informed basis.
• HMA/DEMA/TEMA: Low-lag options for faster signals.
• T3: A smooth, low-lag moving average developed by Tim Tillson.

Settings

• MA Type: Select the moving average used for the basis calculation (SMA, EMA, RMA, WMA, VWMA, SWMA, DEMA, HMA, SMMA, T3, TEMA).
• Length: The lookback period for both the moving average and the standard deviation calculation.
• StdDev: The multiplier for the standard deviation to determine the width of the bands.
• Source: The price data used for calculations (default is Close).
• Offset: Shifts the indicator forward or backward in time on the chart.

FAQ

How do I use the different MA types?

You can select different MA types in the settings menu. Faster MAs like HMA or TEMA will make the bands react more quickly to price changes, while SMMA or SMA will provide a smoother, lagging response.

What do the colors on the basis line mean?

The color changes dynamically: green indicates an uptrend, red indicates a downtrend, and blue indicates consolidation or lack of a clear trend.

How can I access Bollinger Bands Plus?

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