Bollinger Bands Percentile + Stdev Channels (BBPct)

The Bollinger Bands Percentile + Stdev Channels (BBPct) indicator is a mean reversion tool that combines Bollinger Bands percentile ranking with standard deviation volatility analysis to identify extreme overbought and oversold price levels.

Usage

The tool is primarily used to identify potential market reversals when the price reaches statistical extremes. The central oscillator tracks the price's position relative to its Bollinger Bands, normalized to a percentile scale where values above 100 or below 0 indicate deviations beyond the standard bands.

• Bullish Reversals: Look for green triangle signals which occur when the BBPct crosses back above the oversold threshold (-10 to -30 zone) while confirmed by volatility conditions.
• Bearish Reversals: Look for red triangle signals which occur when the BBPct crosses back below the overbought threshold (110 to 130 zone).
• Trend Confirmation: The 50-level midline serves as a separator between bullish and bearish momentum.
• Volatility Analysis: Users can enable the Stdev % histogram to visualize the current market volatility relative to the price, helping to distinguish between quiet ranging markets and high-volatility breakouts.

Details

The script calculates the Bollinger Bands %B and then applies a percentile ranking logic to provide a more normalized view of price action. By comparing the distance of the price from the lower band to the total width of the bands, it creates an oscillator that highlights "atypical" price movements. The integration of standard deviation channels ensures that signals are only generated when price movements are significantly stretched relative to recent historical volatility, reducing noise during sideways consolidation.

Settings

Bollinger Band

• Length: The lookback period for the Simple Moving Average (basis) and Standard Deviation calculation.
• Source: The price data point used for calculations (default is Close).
• Multiplier: The standard deviation multiplier that defines the width of the upper and lower Bollinger Bands.

Settings

• Show Bollinger Band Stdev %: Toggles the visibility of a histogram representing the standard deviation of the price as a percentage of the price itself.

FAQ

How do I interpret the shaded zones on the oscillator?

The shaded red areas at the top (110-130) represent extreme overbought territory, while the shaded green areas at the bottom (-10 to -30) represent extreme oversold territory.

What do the triangle shapes signify?

The triangles represent filtered mean-reversion signals. A green triangle suggests a potential upward pullback from oversold conditions, and a red triangle suggests a potential downward retracement from overbought conditions.

How can I access Bollinger Bands Percentile + Stdev Channels (BBPct)?

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