Price Band forms a static or dynamic channel around the price and follows the movement by giving two values (frontiers). The price should not stay above the red curve or below green (blue) curve without "Correct position by returning between the two curves", but if the horizontal distance between those two curves decreases, that means the price is in a strong uptrend (strong downtrend).
Horizontal trend: when the distance between the blue and the red curves is maximal, the price move between these two curves.
So, this channel shows clearly where the market is going!
Just when we have a new opening bar, the indicator gives two variable values (high and low), which can be considered as levels of support (resistance) for this new candle.
when the parameter 'version' take value 0 so the channel becomes dynamic, that means the two frontiers change value instantly so:
The red curve can be considered like a "dynamic" resistance.
The blue curve can be considered like a "dynamic" support.
when the parameter 'version' take value different to 0 so the channel become static, that means the two fixed boundary values so:
The red curve can be considered like a "static" resistance.
The blue curve can be considered like a "static" support.
2. dis (values positive)
This parameter allows use to change the distance between to curves according to strategy and according the instrument:
It is like a button that allows the search for the appropriate frequency!
Values greater than 1 for enlarge the distance between the two curves (recommended values: 1.3, 1.6, 2.1, 3.8, 5, 6.2 )
Less than 1 to decrease the distance (recommended values: 0.72, 0.6, 0.1)
This indicator is based on mathematical technique called curve fitting which aims to predict the next values of the two forces acting on price movement in order to predict the next frontier of the new open bar, so to better understand and use this indicator is to consider that channel as "interval where the price has to move".
For more details about this system: https://www.mql5.com/en/blogs/post/226558