Bollinger Bands + Pivots - V2

The Bollinger Bands Pivot - V2 indicator identifies and plots key pivot points when price action interacts with the Bollinger Bands, helping traders visualize significant reversal areas and local extremes.

Usage

The Usage section focuses on identifying price reversals at the Bollinger Band extremes. When the price crosses above the upper band or below the lower band and subsequently returns within the bands, the tool marks the highest or lowest point reached during that excursion as a pivot.

• Bullish Reversals: Look for low pivot circles appearing after a price interaction with the lower Bollinger Band.
• Bearish Reversals: Look for high pivot circles appearing after a price interaction with the upper Bollinger Band.
• Trend Confirmation: The inclusion of historical pivot plots allows users to compare current price action against previous local extremes to identify higher highs or lower lows.

Details

This script combines standard volatility-based bands with a custom pivot logic. Instead of marking every swing high or low, it specifically filters for extremes that occur when volatility is high (at the bands).

The tool includes an optional Heikin Ashi calculation mode. When enabled, the Bollinger Bands and the pivot detection logic use Heikin Ashi price data, which can help filter out market noise and provide a smoother interpretation of price trends and reversals.

Settings

• Length: Sets the lookback period for the Simple Moving Average (basis) and the standard deviation calculation.
• Multiplier: Adjusts the width of the Bollinger Bands by multiplying the standard deviation.
• Sensitivity Percent: Filters out minor price fluctuations between consecutive pivots. If the difference between a new potential pivot and the previous one is less than this percentage, the pivot update may be ignored.
• Show BB Line: Toggles the visibility of the Bollinger Band basis, upper, and lower lines.
• Heiken Ashi Calculation: When checked, the script uses Heikin Ashi candle values for all calculations instead of standard candle data.

FAQ

How do I use the pivot points for trading?

Pivots serve as dynamic resistance or support levels based on recent volatility. A high pivot appearing after an upper band touch suggests a potential local top, while a low pivot after a lower band touch suggests a local bottom.

What is the purpose of the Sensitivity Percent?

The Sensitivity Percent helps in noise reduction. By setting a minimum percentage change required to plot a new pivot, you can avoid "cluttered" charts where every tiny price tick near the bands creates a new signal.

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.