Welch Custom Bollinger Bands
Welch Forex presents our Welch Custom Bollinger Bands!
We have been using this indicator as part of our strategy at our offices for the past few years and we have decided to release it to the world!
- Bollinger Bands Period - period for calculation of both ATR and StdDev (default: 20)
- Bollinger Bands Shift - shift away from current time (default: 0)
- Bollinger Bands Deviations - deviation amount (default: 2)
- Use ATR, STD, or Both (default: Use StdDev)
- ATR Period - separate ATR and STDDev periods (default: 0)
- STD Deviation Period - separate ATR and STDDev periods (default: 0)
Main Operation Mode
The main operation mode is adjusted by "Use ATR, STD, or Both" setting as described below:
- Use ATR - the indicator immediately uses ATR to calculate the middle line.
- Use STDDev - the indicator immediately uses STD Deviation to calculate the middle line. (This is the default and original Bollinger Band method.)
- Use Both Combined - the indicator immediately uses both ATR and STD Deviation added together to calculate the middle line.
- Use Both Averaged - the indicator immediately uses both ATR and STD Deviation averaged together to calculate the middle line. (This is our favorite mode)
How to Trade
Originally developed by John Bollinger, Bollinger Bands® are volatility bands placed above and below a moving average. Volatility is based on the standard deviation, which changes as volatility increases and decreases. The bands automatically widen when volatility increases and narrow when volatility decreases. This dynamic nature of Bollinger Bands also means they can be used on different securities with the standard settings. For signals, Bollinger Bands can be used to identify M-Tops and W-Bottoms or to determine the strength of the trend.
By adding the additional ATR calculation to the bands, the visibility into the volatility of the market is enhanced and makes the Welch Bollinger Bands a great addition to your arsenal.