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Directional Bollinger Bands
Source: https://fxcodebase.com/code/viewtopic.php?f=17&t=75786
Forum: 17 · Topic 75786 · 1 post(s)
Directional Bollinger Bands
Apprentice · Tue Apr 01, 2025 12:03 pm
What are Directional Bollinger Bands? Directional Bollinger Bands are a variation of the standard Bollinger Bands indicator. While classic Bollinger Bands consist of a moving average (central line) with bands placed a certain number of standard deviations above and below this moving average, the Directional Bollinger Bands adapt dynamically according to the current price direction. How Directional Bollinger Bands Work: Calculation Basis:
Uses a moving average (default 20 periods).
Bands are placed at a distance determined by a certain number of standard deviations from this moving average (default is 2 deviations).
Directional Adjustment: The bands dynamically adjust based on the price’s direction:
Bullish Direction (price is above moving average): The top line (TL) is calculated as the moving average plus 2 standard deviations. The bottom line (BL) adjusts upward following price movement (trailing).
Bearish Direction (price is below moving average): The bottom line (BL) is calculated as the moving average minus 2 standard deviations. The top line (TL) adjusts downward following price movement (trailing).
Line Breaks (Gaps): When the price crosses above or below the moving average, the bands briefly reset, creating breaks or gaps in the lines.