Description:
BBTrend is a trend indicator derived from Bollinger Bands® observations. It exploits the convergence and divergence patterns of the upper and lower bands (specifically the 20-day and 50-day bands) to identify trends. In uptrends, upper bands converge while lower bands diverge, and vice versa in downtrends. It offers traders a practical tool for trend recognition.
Input Parameters:
- Short: The 20-day moving average period.
- Long: The 50-day moving average period.
Use Cases:
- Trend Identification: Mark the peaks and troughs in the BBTrend histogram as potential starting or ending points of trends. These are indicated by shifts from light to dark bars.
- Confirmation Tool: Peaks or troughs in BBTrend gain additional significance when they coincide with a two-bar reversal pattern at either the upper or lower Bollinger Band.
- Spotting Consolidations: During strong trends, the peaks and troughs in BBTrend often indicate consolidation periods, offering strategic insights for traders.
This feature can be used in:
- Market Scanner
- Strategy Tester
- Multi-Factor Alerts
- Smart Checklist
Do you want to learn more? Check out our blog post.
May 17, 2024