The Bollinger Bandwidth Indicator attempts to measure market volatility by comparing the distance between the upper and lower Bollinger Bands. This indicator plots the Bandwidth, Bulge, and Squeeze, each designed to potentially highlight different aspects of market behavior.
Bandwidth: Represents the width of the Bollinger Bands over time, which can reflect variations in market volatility.
Bulge: Identifies periods when market volatility may have increased based on the widening of the bands.
Squeeze: Signals periods where the bands come closer together, potentially indicating decreased market volatility.
Parameters:
Average Type: The default is set to 'Simple,' but you can change it to 'Exponential,' 'Hull,' 'Smoothed,' 'Weighted,' or 'Wilders' to adjust the type of moving average.
Price: The default basis for the Bandwidth calculation is 'Close,' but you can also select from High, Low, Open, Volume, or VWAP.
Displace: The default value is 0, which means there is no displacement of the bands.
Length: Initially set to 20, this parameter determines the number of periods for the moving average within the Bollinger Bands.
Num Dev Down: Default value is -2.0, which determines the number of standard deviations for the lower band.
Num Dev Up: Default value is 2.0, which determines the number of standard deviations for the upper band.
Bulge Length: The default value is 150, indicating the number of periods used to calculate the Bulge.
Squeeze Length: The default value is 150, indicating the number of periods used to calculate the Squeeze.
Bollinger Bandwidth Crossover Indicator subgraph on chart
*For illustrative purposes only. Not a recommendation of a specific security or investment strategy.