John Bollinger's Bollinger Bands

The John Bollinger's Bollinger Bands indicator provides a comprehensive implementation of the three primary Bollinger tools—classic Bollinger Bands, %B, and Bandwidth—into a single versatile script designed to monitor volatility and price positioning.

Usage

The Usage section focuses on interpreting the three core components of the tool to identify market phases and potential reversals.

• Volatility Monitoring: Use the Bandwidth plot to identify "Squeezes" and "Bulges." A Squeeze occurs when Bandwidth reaches its lowest level in the lookback period (default 125), signaling a contraction often followed by a breakout. A Bulge occurs when Bandwidth reaches its highest level, signaling a peak in volatility where a trend may consolidate or reverse.
• Price Positioning: Utilize the %B output to quantify where price sits relative to the bands. A %B value near 1.0 indicates price is at the upper band, while a value near 0 indicates it is at the lower band. Values above 1 or below 0 signify price "walking the bands" or overextension.
• Trend Analysis: By combining visual markers (triangles) with price action, traders can identify the beginning of new trends (post-Squeeze) or the exhaustion of current moves (post-Bulge).

Details

This script replicates the specific methodology introduced by John Bollinger. It calculates the standard deviation-based bands and further derives:

• %B: (Price - Lower Band) / (Upper Band - Lower Band).
• Bandwidth: (Upper Band - Lower Band) / Middle Band.

A key feature is the inclusion of the 125-period lookback for Squeeze and Bulge detection, a specific parameter recommended by Bollinger for identifying relative volatility extremes across any timeframe.

Settings

Bollinger Bands Settings

• Length: The number of bars used to calculate the middle line (basis) and standard deviation.
• Basis MA Type: Select the moving average type for the midline (SMA, EMA, SMMA, WMA, or VWMA).
• Source: The price input used for calculations (default is Close).
• StdDev: The multiplier for the standard deviation (default is 2.0).

Bandwidth Settings

• Option: Choose between displaying "Bandwidth" or "%B" in the indicator pane.
• Period for Squeeze and Bulge: The lookback window used to determine the highest and lowest Bandwidth levels.

FAQ

How do I display both %B and Bandwidth at the same time? To see both metrics simultaneously, add the indicator to your chart twice. Set the "Option" to %B on the first instance and to Bandwidth on the second instance.

What do the green and red triangles represent? Green triangles represent a "Bulge" (highest bandwidth in the lookback period), and red triangles represent a "Squeeze" (lowest bandwidth in the lookback period).

How can I access John Bollinger's Bollinger Bands? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.