The Multiple Bollinger Bands indicator is similar to the Multiple Deviation Bands. Both indicators offers a selection of 30 different moving averages for calculating the midband. Both have 3 options for calculating the deviation bands. The default setting uses the mean absolute deviation (MAD) from the selected moving average. Alternatively, the median absolute deviation or the root mean square deviation (RMSD) can be used.
Indicator Description
The upper band of the Bollinger Bands indicator ® is obtained by adding a multiple SMA mean deviation, independent of the formula used for the midband. The opposite is true for the lower, which is obtained by subtracting a multiple SMA mean deviation from the midband. For example, if a Gauss filter is used, the root mean square deviation is calculated by comparing the deviation from the last Gauss filter value.
In other words, if an SMA midband is used, the two indicators will plot identically if the same parameters are used for the other settings. If a different midband is used, the Bollinger Bands ® will be different.
Finally, the trend may be displayed via a column in the Market Analyzer.
Other Library indicators
You may increase the probability of locating profitable setups from the Bollinger Bands indicator by using Volume Analysis and avoiding entries that run into key support / resistance levels. A variety of Support / Resistance indicators are available from the Session Tools and Fibonacci indicators categories, including the Current Day Fibonacci Levels / Prior Day Fibonacci Levels, Current Week Fibonacci Levels / Prior Week Fibonacci Levels, the Current Month Fibonacci Levels / Prior Month Fibonacci Levels and the Current N Month Fibonacci Levels / Prior N Month Fibonacci Levels . An Indicator Spotlight also looked into the methodology used for determining Fibonacci Retracement Levels. The Force Index (volume analysis) can be used to further validate reversal setups. Finally, managing open profits can be done by using the Deviation Stop from our trailing stop loss category.
Other library indicators that utilize deviation bands for determining trading setups include the Fibonacci Bands, Multiple Deviation Bands, Projection Bands, the Squeeze Channel, Standard Deviation and the Residual Deviation Bands. The Current Day Median and the Daily, Weekly, Monthly and N Monthly VWAPs also use deviation bands. VWAP trading setups were furthermore discussed in our Indicator Spotlight.
Finally, the Indicator Spotlight has also reviewed other indicators from our Channel Indicators category, namely the Regression Channel and the Donchian Channel. The post on the Squeeze indicator should also be of interest, being a dizygotic twin of the Squeeze Channel.
The Multiple Bollinger Bands indicator is available for NinjaTrader 8.
