The Projection Bandwidth indicator is based on the Projection Bands as introduced by Mel Widner, Ph.D in an Technical Analysis of Stocks & Commodities magazine article from July, 1995.
Indicator Description
Projection Bandwidth is based on the Projection Bands and shows the ratio from bands to midpoint. Bands are narrowing on low numbers whereas high numbers indicate that the bands are widening. Therefore, you may use the bandwidth as a measure of volatility. Narrow bands equals narrow range and low volatility, whereas wide bands indicate a wide range and high volatility. The indicator furthermore comes with shaded color plots, indicating when the bandwidth is likely overbought / oversold.
Other Library indicators
One application of the indicator is to use it as a filter to validate Opening Range Breakouts. You may also want to review market structure and trend bias from a higher timeframe using the Swing Trend indicator.
Other entries from the Channel Indicators categories include the Fibonacci Bands, Multiple Deviation Bands, Residual Standard Deviation Bands and the Multiple Bollinger Bands. You may also want to review the Volatility Indicators category, specifically the Daily Range Projections, Weekly Range Projections and the Monthly Range Projections. Our Indicator Spotlight discussed the Daily Range Projections and you may also have a look at the Spotlights on the Regression Channel, Donchian Channel, TDI Indicator, the Current Week VWAP and the daily Pivot Point Indicator. Finally, you may want to review our discussion of the Fibonacci Retracement Levels (with video).
The Projection Bandwidth indicator is available for NinjaTrader 8.
