The main futures markets.

Bollinger volatility

Trading signal: Bollinger Volatility explosion

Bollinger volatility | Bullish break-out | Candlestick patterns (v.1) | Candlestick patterns (v.2) | Fake Trend Reversal | Gap close | Hammer blast | Heikin Ashi | Inside Bar Break-out | MACD Divergence | Market structure points | Range Break-out | TLB Bands (v.1) | TLB Bands (v.2) |

Description

The creator of the Bollinger Bands, John Bollinger, states that periods of low volatility are often followed by periods of high volatility. When volatility increases, Bollinger Bands widen. John Bollinger further states that an "explosion" in volatility offers an opportunity for traders.

This trading signal detects when a volatility explosion based on the Bollinger Bands occurs. In order to measure and visualize the explosion, NanoTrader displays the volatility in percent in a chart below the main chart. This indicator is called the Bollinger Bands Volatility Oscillator.

The Bollinger Volatility Explosion signal is very versatile:


Instruments : All
Time frame(s) : All
Buy signals : Yes
Short sell signals : Yes

When to open a position?

A buy signal appears if:

  • the oscillator crosses above the 50% threshold, and
  • the market price is above the Bollinger Bands.
Bollinger Bands volatility explosion

This example shows a buy signal. The Bollinger Bands Volatility Oscillator explodes above the threshold and the market price is above the Bollinger Bands.


A short sell signal appears if:

  • the oscillator crosses above the 50% threshold, and
  • the market price is below the Bollinger Bands.
Bollinger Bands volatility oscillator

This example shows a short sell signal. The Bollinger Bands Volatility Oscillator explodes above the threshold and the market price is below the Bollinger Bands.