Bollinger Band Wick and SRSI Signals

The Bollinger Band Wick and SRSI Signals indicator combines Bollinger Bands, candle wick analysis, and the Stochastic RSI to identify potential price pivots and trend exhaustion points in real-time.

Usage

This tool identifies four primary signal types based on price interaction with Bollinger Bands and the baseline:

• B (Buy Signal): Occurs when a candle wicks below the lower Bollinger Band but closes above it, indicating a potential upward pivot from an oversold area.
• S (Sell Signal): Occurs when a candle wicks above the upper Bollinger Band but closes below it, indicating a potential downward pivot from an overbought area.
• B1 (Baseline Buy): Triggers when a wick crosses below the rising baseline and closes above it, useful for identifying trend-following entries during an uptrend.
• S1 (Baseline Sell): Triggers when a wick crosses above the falling baseline and closes below it, useful for identifying trend-following entries during a downtrend.

During ranging markets, price typically oscillates between the upper and lower bands. Signals at these boundaries (B and S) help identify reversal points. In trending markets, the B1 and S1 baseline signals allow traders to find optimal entry points with reduced drawdown.

Details

The indicator relies on three specific conditions to validate a signal:

1. Extension: Price must be approaching or extending beyond the Bollinger Band boundaries or the baseline.
2. Rejection (Wicks): A candle must exhibit a wick of a specific proportion (determined by the Wick Ratio setting). This signifies that while price pushed to a level, it was rejected by the opposing market force before the candle closed.
3. Cyclic Confirmation: When enabled, the Stochastic RSI filter ensures signals only fire when the oscillator is in overbought (>80) or oversold (<20) territory, providing a secondary layer of trend exhaustion confirmation.

Settings

Signals

• Show Bollinger Band Signals: Toggles the display of the main band labels (B and S).
• Hide Baseline Signals: When enabled, removes the secondary baseline labels (B1 and S1).
• Show Wick Signals: Toggles small triangle shapes indicating trend weakness based on wick thresholds.

Bollinger Band Settings

• Period length for Bollinger Band Basis: The lookback period for the middle moving average.
• Basis MA Type: Selection of the moving average type (SMA, EMA, WMA, etc.).
• Standard Deviation Multiplier: Adjusts the width of the bands relative to volatility.

Wicks Settings for Bollinger Band Signals

• Wick Ratio for Bands: The minimum required ratio of wick size to the total candle/body size to trigger a band signal.
• Wick Ratio for Baseline: The minimum required ratio of wick size to the total candle/body size to trigger a baseline signal.

Wick Settings for Candle Signals

• Upper/Lower Wick Threshold: The percentage of the wick relative to the candle size required to trigger trend weakness markers.
• Use Candle Body: Determines if wick calculations are based on the full candle height or just the candle body.

Stochastic RSI Settings

• Use Stochastic RSI Filtering: Toggles the oscillator requirement for signal generation.
• K/RSI Length/Stochastic Length: Standard parameters for calculating the Stochastic RSI oscillator.

FAQ

How do I interpret the difference between B/S and B1/S1?

B and S signals represent pivots at the outer Bollinger Bands, often indicating major reversals or range boundaries. B1 and S1 are baseline-specific signals designed to capture smaller pullbacks toward the mean within an active trend.

What does "Wick Ratio" control?

The Wick Ratio defines how significant a "rejection" must be. A higher ratio means the wick must be larger relative to the candle size to trigger a signal, resulting in fewer but potentially more significant alerts.

How can I access Bollinger Band Wick and SRSI Signals?

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