Indicators: Fractional Bands

Moderator
187101

A modification of the Bollinger Bands, in the same spirit as the Fractal Bands, but using a mathematically more precise equation

Author: Jean-Philippe Poton

16319

I don't know how to program it but I think that if you subtract the lower band from the higher band and then use the result in an MACD you will have a very useful indicator.

Another technique for trading is to recognise major S/R when a prior Upper or Lower Band constriction is approximately (within a few pips) equal to a current opposite band constriction.

In the chart notice the level of the upper green band around 6 May 18:45 and then the level of the lower green band at about 6 May 22:45.

When the upper/lower bands are approximately equal (or if they cross) the difference becomes a very strong S/R zone.

13

OpaBert:

I don't know how to program it but I think that if you subtract the lower band from the higher band and then use the result in an MACD you will have a very useful indicator.

Another technique for trading is to recognise major S/R when a prior Upper or Lower Band constriction is approximately (within a few pips) equal to a current opposite band constriction.

In the chart notice the level of the upper green band around 6 May 18:45 and then the level of the lower green band at about 6 May 22:45.

When the upper/lower bands are approximately equal (or if they cross) the difference becomes a very strong S/R zone.

Interesting remark, I never gave much thought to this perspective, let me study it for a while and I'll come back to you.

One point you may not have noticed and that may be interesting in relation with your idea is that the red curve (fractal bands) can be easily adjusted by a change of the parameter "alpha" since it is mathematically less correct and therefore less constrained than the green curve (see my blog for more details on the construction of both curves: http://fractalfinance.blogspot.com/)