toptahlil_bollinger_and_atr_band
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This technical indicator is designed to provide traders with a visual representation of market volatility and price boundaries by combining two well-known analytical tools: Bollinger Bands and the Average True Range (ATR).
How the Logic Works
The primary goal of this script is to create an expanded "channel" on your price chart. It does this by layering the volatility data from the ATR onto the standard Bollinger Band structure. Here is a breakdown of the logic:
1. Baseline Calculation (Bollinger Bands) The script first identifies the standard Bollinger Bands based on user-defined settings (such as the moving average period and deviation). These bands act as the primary "walls" for price action, showing where the asset typically fluctuates relative to its recent average.
2. Volatility Measurement (ATR) Simultaneously, the script calculates the Average True Range (ATR). Unlike the Bollinger Bands, which look at price standard deviation, the ATR specifically measures how much an asset moves, on average, during a given timeframe. This provides a raw "pulse" of market volatility.
3. The Expansion Logic (Combined Bands) This is where the unique logic occurs:
- The script takes the Upper Bollinger Band and adds a multiple of the ATR to it to create an even higher upper boundary.
- It takes the Lower Bollinger Band and subtracts that same ATR multiple to create a lower boundary.
What this means for the trader
By merging these two indicators, the script creates a "dynamic buffer." While standard Bollinger Bands can sometimes be too tight during high-volatility events, incorporating the ATR allows the bands to expand or contract more aggressively based on real-time market movement.
Visual Output: The indicator displays four distinct lines on your chart:
- Outer Boundaries (Dotted Lines): These represent the "Extended" bands created by adding/subtracting the ATR from the Bollinger Bands. They serve as the extreme limits of expected price movement.
- Inner Boundaries (Solid Lines): These represent the standard Bollinger Bands, providing a secondary layer of support and resistance for price analysis.
Essentially, this tool helps you visualize the "danger zones" or "exhaustion points" of a market by showing you not just where the price has been, but how much room it typically has to move based on current volatility conditions.
//+------------------------------------------------------------------+
//| toptahlil Bollinger and ATR Band .mq4 |
//+------------------------------------------------------------------+
//| toptahlil Bollinger and ATR Band .mq4 |
//| Copyright 2014, Toptahlil Software Corp |
//| Emial : Toptahlil@yahoo.com |
//+------------------------------------------------------------------+
#property description "feedbacks: https://login.mql5.com/en/users/toptahlil/feedbacks"
#property copyright "post a job for me: http://www.mql5.com/en/job/new?prefered=toptahlil"
#property link "Emial : Toptahlil@yahoo.com"
#property description "Skype ID : Toptahlil"
#property description "MQL5 ID : Toptahlil"
#property version "1.01"
#property indicator_chart_window
#property indicator_buffers 4
#property indicator_color1 Red
#property indicator_color2 Red
#property indicator_color3 Blue
#property indicator_color4 Blue
#property indicator_style1 STYLE_SOLID
#property indicator_style2 STYLE_SOLID
#property indicator_style3 STYLE_DOT
#property indicator_style4 STYLE_DOT
#include <stdlib.mqh>
//+------------------------------------------------------------------+
//| Common External variables |
//+------------------------------------------------------------------+
extern double ATRMult=2;
extern int ATR_Period=10;
extern int Band_Period=20;
extern double Band_Diviations=3;
extern int Band_Shift=0;
extern ENUM_APPLIED_PRICE Band_ApplyPrice=PRICE_MEDIAN;
//+------------------------------------------------------------------+
//| Special Convertion Functions |
//+------------------------------------------------------------------+
int LastTradeTime;
double ExtHistoBuffer[];
double ExtHistoBuffer2[];
double ExtHistoBuffer3[];
double ExtHistoBuffer4[];
//+------------------------------------------------------------------+
//| |
//+------------------------------------------------------------------+
void SetLoopCount(int loops)
{
}
//+------------------------------------------------------------------+
//| |
//+------------------------------------------------------------------+
void SetIndexValue(int shift,double value)
{
ExtHistoBuffer[shift]=value;
}
//+------------------------------------------------------------------+
//| |
//+------------------------------------------------------------------+
void SetIndexValue2(int shift,double value)
{
ExtHistoBuffer2[shift]=value;
}
//+------------------------------------------------------------------+
//| End |
//+------------------------------------------------------------------+
void SetIndexValue3(int shift,double value)
{
ExtHistoBuffer3[shift]=value;
}
//+------------------------------------------------------------------+
//| |
//+------------------------------------------------------------------+
void SetIndexValue4(int shift,double value)
{
ExtHistoBuffer4[shift]=value;
}
//+------------------------------------------------------------------+
//| |
//+------------------------------------------------------------------+
int init()
{
SetIndexStyle(0,DRAW_LINE,indicator_style1,1,indicator_color1);
SetIndexBuffer(0,ExtHistoBuffer);
SetIndexStyle(1,DRAW_LINE,indicator_style2,1,indicator_color2);
SetIndexBuffer(1,ExtHistoBuffer2);
SetIndexStyle(2,DRAW_LINE,indicator_style3,1,indicator_color3);
SetIndexBuffer(2,ExtHistoBuffer3);
SetIndexStyle(3,DRAW_LINE,indicator_style4,1,indicator_color4);
SetIndexBuffer(3,ExtHistoBuffer4);
return(0);
}
//+------------------------------------------------------------------+
//| |
//+------------------------------------------------------------------+
int start()
{
//+------------------------------------------------------------------+
//| Local variables |
//+------------------------------------------------------------------+
int shift=0;
double Band_Up,Band_Dwon,ATR;
double KU=0;
double KL=0;
/*[[
Name := Keltner ATR Bands
Author := Copyright © 2005, MetaQuotes Software Corp.
Link := http://www.metaquotes.net/
Separate Window := No
First Color := White
First Draw Type := Line
First Symbol := 217
Use Second Data := Yes
Second Color := White
Second Draw Type := Line
Second Symbol := 218
]]*/
SetLoopCount(0);
// loop from first bar to current bar (with shift=0)
for(shift=Bars-1;shift>=0;shift--)
{
Band_Up = iBands(Symbol(),Period(),Band_Period,Band_Diviations,Band_Shift,Band_ApplyPrice,MODE_UPPER,shift);
Band_Dwon = iBands(Symbol(),Period(),Band_Period,Band_Diviations,Band_Shift,Band_ApplyPrice,MODE_LOWER,shift);
ATR=iATR(Symbol(),Period(),ATR_Period,shift);
KU=Band_Up + ATRMult*ATR;
KL=Band_Dwon - ATRMult*ATR;
SetIndexValue(shift,KU);
SetIndexValue2(shift,KL);
SetIndexValue3(shift,Band_Up);
SetIndexValue4(shift,Band_Dwon);
}
return(0);
}
//+------------------------------------------------------------------+
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