Indicator
Bollinger Bands Percentile + Stdev Channels (BBPct) [AlgoAlpha]Description:
The "Bollinger Bands Percentile (BBPct) + STD Channels" mean reversion indicator, developed by AlgoApha, is a technical analysis tool designed to analyze price positions using Bollinger Bands and Standard Deviation Channels (STDC). The combination of these two indicators reinforces a stronger reversal signal. BBPct calculates the percentile rank of the price's standard deviation relative to a specified lookback period. Standard deviation channels operate by utilizing a moving average as the central line, with upper and lower lines equidistant from the average based on the market's volatility, helping to identify potential price boundaries and deviations.
How it Works:
The BBPct indicator utilizes Bollinger Bands, which consist of a moving average (basis) and upper and lower bands based on a specified standard deviation multiplier. By default, it uses a 20-period moving average and a standard deviation multiplier of 2. The upper band is calculated by adding the basis to the standard deviation multiplied by the multiplier, while the lower band is calculated by subtracting the same value. The BBPct indicator calculates the position of the current price between the lower and upper Bollinger Bands as a percentile value. It determines this position by comparing the price's distance from the lower band to the overall range between the upper and lower bands. A value of 0 indicates that the price is at the lower band, while a value of 100 indicates that the price is at the upper band. The indicator also includes an optional Bollinger Band standard deviation percentage (%Stdev) histogram, representing the deviation of the current price from the moving average as a percentage of the price itself.
Standard deviation channels, also known as volatility channels, aid in identifying potential buying and selling opportunities while minimizing unfavorable trades. These channels are constructed by two lines that run parallel to a moving average. The separation between these lines is determined by the market's volatility, represented by standard deviation. By designating upper and lower channel lines, the channels demarcate the borders between typical and atypical price movements. Consequently, when the market's price falls below the lower channel line, it suggests undervaluation, whereas prices surpassing the upper channel line indicate overvaluation.
Signals
The chart displays potential reversal points through the use of red and green arrows. A red arrow indicates a potential bearish retracement, signaling a possible downward movement, while a green arrow represents a potential pullback to the positive, suggesting a potential upward movement. These signals are generated only when both the BBPct (Bollinger Bands Percentage) and the STDC (Standard Deviation Channel) indicators align with bullish or bearish conditions. Consequently, traders might consider opening long positions when the green arrow appears and short positions when the red arrow is plotted.
Usage:
This indicator can be utilized by traders and investors to effectively identify pullbacks, reversals, and mean regression, thereby enhancing their trading opportunities. Notably, extreme values of the BBPct, such as below -5 or above 105, indicate oversold or overbought conditions, respectively. Moreover, the presence of extreme STDC zones occurs when prices fall below the lower channel line or cross above the upper channel line. Traders can leverage this information as a mean reversion tool by identifying instances of peak overbought and oversold values. These distinctive characteristics facilitate the identification of potential entry and exit points, thus augmenting trading decisions and enhancing market analysis.
The indicator's parameters, such as the length of the moving average, the data source, and the standard deviation multiplier, can be customized to align with individual trading strategies and preferences.
Originality:
The BBPct + STDC indicator, developed by AlgoAlpha, is an original implementation that combines the calculation of Bollinger Bands, percentile ranking, the %Stdev histogram and the STDC. While it shares some similarities with the Bollinger Bands %B indicator, the BBPct indicator introduces additional elements and customization options tailored to AlgoAlpha's methodology. The script is released under the Mozilla Public License 2.0, granting users the freedom to utilize and modify it while adhering to the license terms.
Indicator
Hull WavesThe Hull Waves indicator is based on the Hull Moving Averages (HMA), which are special moving averages that stand out for their ability to filter out market noise and offer a clearer view of price trends. Compared to traditional moving averages, HMAs are more responsive yet smoother, allowing traders to capture significant price movements without getting overwhelmed by short-term fluctuations.
The HMAs integrated into Hull Waves provide two distinct perspectives on the price trend:
8-period HMA: This short-term HMA is extremely reactive and closely follows price changes. It is ideal for capturing short-term trading signals while the medium-term 21-period HMA offers a more balanced view of price trends and identifies medium-term trends.
By crossing HMAs, traders can efficiently identify trend reversal points or strong market continuations.
Another feature of the indicator is the “fan” of dynamic lines, which acts as a visual float for price candles, allowing traders to quickly evaluate trading opportunities.
The "fan" or float of dynamic lines represents a visual representation of the candle's price movements. These lines extend from the start point to the end point, like an open fan. This visual approach makes the market dynamics immediately evident.
Strategy:
Long Entry Signal (Buy):
When the Hull Waves range shows a series of upward sloping lines and the Hull Moving Averages (e.g. 8-period HMA) crosses the 21-period HMA upwards, it is a long entry signal.
Confirmation of the signal can come from an increase in trader volume or other supporting indicators.
Place a buy order at the next closing price.
Short Entry Signal (Sell):
When the Hull Waves range shows a series of downward sloping lines and the Hull Moving Averages (e.g. 8-period HMA) crosses the 21-period HMA downward, it is a short entry signal.
Confirm the signal with an increase in trader volume or other relevant indicators.
Place a sell order at the next closing price.
Exit Signal (Closing a Position):
To close a long position, wait for a signal reversal, such as the Hull Moving Averages crossing downwards or a change in the Hull Waves range.
To close a short position, wait for a signal reversal, such as the Hull Moving Averages crossing higher or a change in the Hull Waves range.
Indicator
