Forex Bollinger Band width EA Setup - Setting Up Bollinger Band width Expert Advisor

Forex Bollinger Band width EA Setup - Setting Up Bollinger Band width EA - A trader can come up with an Bollinger Band width EA based on the awesome indicator explained below.

Forex Bollinger Band width EA rules can be combined with other Forex trading indicators to come up with other Expert Advisor Forex Robots that trade using rules based on two or more indicators combined to form a trading system.

Bollinger Band width Forex Technical Analysis Signals

Developed by John Bollinger.

This technical indicator is derived from the original Bollinger technical indicator.

Bandwidth is a measure of the width of the Bollinger Bands.

Calculation

Bandwidth = Upper Band - Lower Band

Middle Band

Forex Bollinger Band width EA Setup

This is an oscillator, based on the theory that price & volatility occurs in cycles.

Periods of high volatility is followed by periods of low volatility.

When volatility is high, bands are far apart, the band width will also be wide apart.

When volatility is low, Bands are narrow and the bandwidth indicator will also not be narrow.

The blue line represents the highest Bandwidth value for a previous number of periods.

This line also identifies periods of high volatility

The redline represents the lowest Bandwidth value for a previous number of periods.

This line also identifies periods of low volatility

Forex Trading Analysis and Generating Signals

Consolidation - Bollinger Squeeze

Bollinger Bandwidth is used to identify the squeeze, which is a consolidation period of price, after which the price then breaks out in a particular direction.

Signals are generated when there's a forex trading price break-out signal is generated by the indicator starting to go up after touching the red line. When the bandwidth line starts to move upward it signifies that volatility is rising as the price is breaking out.

Squeeze

Break-out Signal After Bandwidth Squeeze

However, this is a directionless indicator & needs to be combined with another indicator such as the moving average to figure out the direction of the trend/ Breakout.