Bollinger band alerts
May 14, 2018
The Bollinger band alerts indicator provides a streamlined way to monitor price volatility and mean reversion levels using multiple standard deviation bands and built-in notification conditions.
Usage
The indicator can be used to identify potential overextended price conditions or trend continuation points. Traders often use the SD 2 and SD 3 bands as dynamic support and resistance levels. By observing price action at these extremes, users can identify:
- Mean Reversion: Potential reversals when price touches or exceeds the SD 3 bands.
- Volatility Breakouts: Price holding near the SD 2 bands during strong trending phases.
The tool includes four preset alert conditions that trigger when price crosses the specific upper or lower boundaries, allowing for passive monitoring of multiple volatility levels.
Details
This script calculates standard Bollinger Bands using a Simple Moving Average (SMA) as the baseline. It plots two sets of bands simultaneously:
- Standard Deviation 2: Typically represents ~95% of price action.
- Standard Deviation 3: Represents ~99.7% of price action, often marking significant exhaustion points in the market.
The script is optimized for clarity, using distinct line thicknesses to differentiate between the two deviation levels while providing a background fill for the widest range.
Settings
- Bollinger band length: Determines the lookback period for the SMA and standard deviation calculations (default is 20).
- Display Standard Deviation - 2: Toggle to show or hide the SD 2 bands on the chart.
- Display Standard Deviation - 3: Toggle to show or hide the SD 3 bands on the chart.
FAQ
How do I use the alerts?
You can configure alerts by clicking the "More" icon on the indicator name in the chart or using the Alert menu. Select the specific condition (e.g., "Price reached upper band (SD 3)") to receive notifications.
Can I change the source price?
In the current version, the source is fixed to the closing price to ensure consistency with standard Bollinger Band calculations.
How can I access Bollinger band alerts?
You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.
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