#twitter-follow { border: 0;position: fixed; top: 240px; left:0;} #live-support { border: 0;position: fixed; top: 370px; left:0;} #knowledge-base { border: 0;position: fixed; top: 170px; left:0;}

## Bollinger Bands and Fibonacci Ratios

 by Brian Brown, 5091 days ago

Another technical analysis tool that is based on the standard Bollinger Bands indicator is the Fibonacci Bollinger Bands. It is almost the same as the standard Bollinger Bands with the difference that instead of using the standard deviation to calculate the volatility of the asset, the Fibonacci Bollinger Bands uses Wilders Smoothed indicator (Wilder Volatility Index - Average True Range), also known as ATR - Average True Range.

Once the Wilders Smoothed value, ATR, is calculated, three upper bands and 3 lower bands are created by multiplying this ATR value with positive and negative Fibonacci factors and then adding the result to the middle band, which is based on the simple moving average of the close price. These Fibonacci factors are: 1.618, 2.618 and 4.236.

The trading indicator name is "bbandsFibo" and the 7 lines that compose the Fibonacci Bollinger Bands can be created using the following formula:

per = 20;
bbf = BbandsFibo(per);
UpperBand3 =SMA(close, per) + ( 4.236 * bbf);
UpperBand2=SMA(close, per) + ( 2.618 * bbf);
UpperBand1=SMA(close, per) + ( 1.618 * bbf);
MidPoint0=SMA(close, per);
LowerBand1=SMA(close, per) - ( 1.618 * bbf);
LowerBand2=SMA(close, per) - ( 2.618 * bbf);
LowerBand3=SMA(close, per) - ( 4.236 * bbf);

Plot(MidPoint0,"",colorGreen);
Plot(UpperBand1,"",colorRed);
Plot(LowerBand1,"",colorRed);
Plot(UpperBand2,"",colorAqua);
Plot(LowerBand2,"",colorAqua);
Plot(UpperBand3,"",colorYellow);
Plot(LowerBand3,"",colorYellow);

The Bollinger Bands Fibonacci Ratios indicator is used in stock, commodity and Forex trading and it can be added to a trading system to detect price reversals, which often occur when the stock or commodity price touches the upper (crosses above) or lower band (crosses below). These bands widen when the volatility as measured by the Average True Range becomes higher and decreases as the volatility of the asset decreases.

Another technical indicator derived from the Bollinger Bands can be downloaded here Percent Bollinger Bands. For Fibonacci-based indicator, you can download Fibonacci Trading with the Retracement Levels/Ratios and Fibonacci retracement: Golden ratio

What is this?

 Type: Trading Indicator Object ID: 706 Country: All Market: All Style: Technical Analysis

 Related objects Empty
Number of reviews
Average rate
Click to rate this item
Number of rates the current object received
Report an object
if you can't run it for example or if it contains errors
Click to report this object

 Random Blog Posts Stock Market Prediction Trading Indicators using the Rank and Percentile functions How to Create Custom Metrics for Your Trading Positions How to search for a trading item How to create market indicators using the composite function - Part 3 How to create market indicators using the composite function - Part 2 Create a Pivot Table that displays the Relative Strength Index - RSI 6 Stock Trading Items Related to the New York Stock Exchange - NYSE Show All

Number of reviews
Average rate
Click to rate this item
Number of rates the current object received
Report an object
if you can't run it for example or if it contains errors
Click to report this object