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Bermaui Deviation Percent

Bermaui Deviation Percent (BD%) is a volatility index that measures volatility in percent rather than points. The idea of BD% is to make an index depending on Classic Standard Deviation (CSD) that moves between 0 and 100 percent.

Percent based technical indicators can be very useful at comparing more than one security with each other giving traders a great advantage when analyzing the market. BD% is a relative measurement for CSD and this makes it a very useful tool. You can use BD% to compare volatility for the same security in different time periods or different timeframes. In addition, you can use BD% to compare volatility between different securities in different markets in term of percent rather than points.

The idea behind this indicator explained in the next steps:

  1. Calculate Classic Standard Deviation (CSD) for X number of days.
  2. Find the Highest High of CSD in the same X number of days ( = HHV(CSD,X)).
  3. Find the Lowest Low of CSD in the same X number of days ( = LLV(CSD,X)).
  4. BD% = ( HHV(CSD,X) – CSD) / ( HHV(CSD,X) – LLV(CSD,X)).


How to use "BD%"

  • If BD% is under 90% and then crosses this level upwards, this is a sign that prices may move in a ranging area.
  • If BD% is above 90% and then crosses this level downwards, and the price is already above its simple moving average, this is a sign for the beginning of a new ascending trend. As BD% gets deeper to the downside, volatility and trend strength are increasing. When BD% is 0%, this means that volatility is at its highest value. When BD% leaves 0%, then volatility is decreasing and ascending trend is getting weak.
  • If BD% is above 90% and then crosses this level downwards, and the price is already below its simple moving average, this is a sign for the beginning of a new descending trend. As BD% gets deeper to the downside, volatility and trend strength are increasing. When BD% is 0%, this means that volatility is at its highest value. When BD% leaves 0%, then volatility is decreasing and descending trend is getting weak.


Features

  • Alert when BD% crosses 90% upwards indicating the beginning of a new ranging price movement.
  • Alert when BD% crosses 90% downwards and is close above SMA indicating the beginning of a new ascending trend.
  • Alert when BD% crosses 90% downwards and is close below SMA indicating the beginning of a new descending trend.
  • Well-designed style that users can control.


BD% most important inputs

  • Candles - number of candles used in bands calculations (default is 50 candles).
  • Width - choose the BD% width (default is 1).
  • Sideway_Color – BD% color when the price enters a ranging area (default is Orange).
  • Up_Color – BD% color when the price enters an ascending trend (default is Green).
  • Down_Color – BD% color when the price enters a descending trend (default is Red).
  • Upper_Level – if BD% goes above this level, then it is the beginning of a ranging market (default is 90%).
  • Lower_Level – if BD% goes under this level, then trend carries a high volatility (default is 10%).
  • Level_Color – default is Gray.
  • Alerts - use or stop alert sound and message (default is true).
  • Text_Range_Area – alert message when the price goes into a new ranging area.
  • Text_Up_Trend – alert message when the price goes into a new ascending trend.
  • Text_Down_Trend - alert message when the price goes into a new descending trend.
  • eMail_Send - send notification to users (default is false).
  • eMail_subject – email text content.
  • Notification_Send - send notification (default is false).

I hope you find Bermaui Deviation Percent (BD%) a good investment tool for you.

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