This indicator can be used to identify overbought and oversold situations and as with most momentum oscillators, it is better to look for oversold situations over the short term and when the medium-term trend is up and visa versa for overbought. You should be looking for openings in the direction of the larger trend movements, such as a pullback within a bigger uptrend. The best use of this indicator is with a trending market.
Provides a bullish signal when a retracement of the %B value has closed below the lower Bollinger line of 0 and is followed by a second retracement where the %B value moves back above the lower Bollinger line of 0.
Provides a bearish signal when a retracement of the %B value has closed above the upper Bollinger line of 1 and is followed by a second retracement where the %B value moves back below the upper Bollinger line of 1.
The long and short alerts are calculated on each incoming price tick of data and not when the candle closes, this may produce some false signals, but is much faster.
Calculation & Formula
Bollinger %B = (Price - Lower Band)/(Upper Band - Lower Band)
Indicator Lines Explained
Bollinger Band %B quantifies a security's price relative to the upper and lower Bollinger Band and there are six basic relationship levels. While the cTrader Bollinger %B indicator can have some value on its own, it is best when used in combination with other indicators for price analysis.%B equals 1 when the price is at the upper band
- %B equals 0 when the price is at the lower band
- %B is above 1 when the price is above the upper band
- %B is below 0 when the price is below the lower band
- %B is above .50 when the price is above the middle band (20-day SMA)
- %B is below .50 when the price is below the middle band (20-day SMA)
Configurable Parameters Explained
Your adjustable parameters are shown below with explanations of the less obvious ones.
- Show signal lines: if set to YES a vertical line is displayed on the chart for a buy or sell signal.
- Price: option to choose open, high, low or close prices.
- Period: the periods used in the calculation
- Std deviation: the standard deviation
- MA type: 8 different types of moving average to choose including Hull.
You will notice that some of the configurable settings show an email address, this is the address that alert messages are sent to, by default no emails will be sent if you have not set up an email account with the cTrader platform.
To receive Telegram notifications you will need to find your Bot Token and Chat ID credentials.
What is Telegram?
The Telegram messenger service is a secure encrypted chat tool that you can install on your mobile phone or PC which allows traders to share information and receive trade alerts from automated trading systems (cBots) and custom indicators.
Watch a Video Explainer
We have recorded a hands-on tutorial on how to use the cBot.
Duration: 8-minutes - Watch full screen on YouTube
How To Install
First, make sure you have the cTrader trading platform installed and then simply unzip the file and double-click on it to automatically install onto the platform.
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