Indicator
Indicator
Indicator
Indicator
Indicator
Indicator
Inverse BandsThis was the result of quite some time spent examining how much information could be gleamed by studying the interactions between Keltner Channels, STARC Bands and Bollinger Bands. I was surprised by the results.
First of all, there are four fills that are black. Set the transparency of those to 0 and you'll see this indicator the way that it's meant to be seen. Those fills belong to unused sections of the Bollinger Bands.
There are two clouds which represent STARC Bands and the Keltner Channel. There is some delay when they flip from bullish (green) to bearish (red), but they are indicative of the trend. The space between them is black and the narrower that space is, the greater volatility is. Because of this, we don't need the exterior Bollinger Bands.
The Bollinger Bands remain visible as the yellow interior clouds on the top cloud and the blue interior clouds on the bottom cloud. Often, the thicker the yellow or blue cloud is, the less severe a throwback from a given trend reversal will be. Often the thinner that yellow or blue cloud is, the more severe the trend reversal will be. If price is rising into a thin interior yellow cloud, the following dip will be substantial. If price action dips towards a thicker interior blue cloud, often the pump following that dump will be less enthusiastic.
We preserve the Keltner Channel and STARC bands as our cloud because the way that they interact with the three basis lines yields a lot of information.
The yellow Bollinger basis line tells us about trend strength. The closer the BB basis line is to the top of the top cloud or the bottom of the bottom cloud, the stronger the trend is. When it enters the cloud very close to the bottom of the bottom cloud, you know you're looking at a strong pump, and vice versa when it's close to the top of the top cloud.
The purple Keltner Channel basis line and orange STARC Band basis line can forecast short term trend changes one candlestick in advance by contacting any line in either cloud. The moment either basis line touches or crosses any boundary of the clouds, you know that the next candle will change directions. In an uptrend, a touch or cross means the next candle will have a lower high point. In a downtrend, a cross or touch means the next candle will have a higher high point. This is most useful in scalping.
It'd be pretty easy to slap some crossover alerts on to this and useful considering that they come a candle in advance. Feel free to further explore and develop this. Indicator
Indicator
Indicator
Volatility Bands by DGTVolatility represents how large an asset's prices swing around the mean price, the degree of variation of a trading price over time, and is commonly measured with beta (β) coefficients, standard deviations (σ) of returns where tools such as Average True Range, Bollinger Bands, Keltner Channel, Squeeze Indicator, etc presents volatility concept
Volatility often refers to the amount of uncertainty or risk related to the size of changes in a security's value. The higher the volatility, the riskier the security - the price of the security can change dramatically over a short time period in either direction. A lower volatility - security's value does not fluctuate dramatically, and tends to be more steady
This study, Volatility Bands , attempts to present a way to measure and visualize volatility , using standard deviations (σ) and average true range indicator, and aims to point out areas that might indicate potential trading opportunities
I will try to explain the usage with examples,
same setup with different option selected
as you may observe from the examples different setting may have advantages and disadvantages over one another, it is recommended to verify a trading setup with different available options.
Additionally, It is recommended to use this indicator in conjunction with other technical indicators, or verify using chart/candle patterns. Below is an usage example using in conjunction with other indicator, in the given example “Neglected Volume by DGT” is selected
Similarities and Differences
Bollinger Bands depicts two standard deviations above and below a simple moving average, and Keltner Channel depicts two times average true range (ATR) above and below an exponential moving average
Volatility Bands study combines the approach of both Bollinger Bands and Keltner Channel, with different settings and different visualization
Default settings are one standard deviations and one time average true range (ATR) above and below 13 period exponential moving average. Setting can be adjusted by users but let me remind all testes are performed with the default settings.
Mathematically expressed as
Upper band area between “ema + stdev” and “ema + atr”
Lower band area between “ema – stdev” and “ema – atr”
A different display is added with the inspiration I get from one of the @quantgym ‘s study, many thanks @quantgym 😉
When difference band display is selected the study will reflect the area between “ema + stdev – atr” and “ema – stdev + atr”. As shown in the examples above
Note: standard deviation calculation can be adjusted based on price action or its moving average.
Other differentiation between BB and KC is with V-BANDS mostly we look for trade opportunities when price action move out of the bands and in most cases we assume market is consolidating when the price action is within the bands
The other indicator that presents similarities to Volatility Bands is Squeeze Indicator, which measures the relationship between Bollinger Bands and Keltner's Channels to help identify consolidations and signal when prices are likely to break out. Mainly Volatility Bands is different version of Squeeze indicator, in fact the purpose is almost same but visualization is completely different. Additionally Volatility Bands Offers trading opportunities whereas Squeeze indicator only presents market states unless a momentum indicator is adapted to Squeeze indicator.
Disclaimer:
Trading success is all about following your trading strategy and the indicators should fit within your trading strategy, and not to be traded upon solely
The script is for informational and educational purposes only. Use of the script does not constitute professional and/or financial advice. You alone have the sole responsibility of evaluating the script output and risks associated with the use of the script. In exchange for using the script, you agree not to hold dgtrd PulseWire user liable for any possible claim for damages arising from any decision you make based on use of the script
Indicator
Geometric Brownian Motion BandIf you are an option trader, who are constantly searching opportunities to set up inverse iron condor position or other strategies, you must be familiar in estimating the range induced by Geometric Brownian Motion (GBM), or Lognormal distribution someone may call.
The theory behind is adopted in the Black Scholes Option Pricing model, this assumes the asset price follows the GBM, shown below, and estimates the range where the price will fall into on the specific date and probability.
dS = a dt + v dW
Assuming the drift term is zero, this GBM Band applies the same model and helps you to quickly assess the suitable range to set up your option strategies with simple setting:
Length – number of bars covered
Vol Multiple - the z-score of the probability
Default values of the Length and Vol Multiple are set to 20 bars and 2.0 z-score respectively.
You can find an example how the GMB Band work.
You can also applies this GMB Band like how Bollinger's Band does for swing trade or breakaway trade.
If you find this indicator is useful to you, Star it, Follow, Donate, Like and Share.
Your support is a highly motivation for me.
Indicator
Indicator
Indicator
Indicator
Indicator
Indicator
Indicator
Indicator
Indicator
Indicator
Indicator
Indicator
Indicator
