The toptahlil_bollinger_and_atr_band indicator for MetaTrader4 is a combination of the Bollinger and ATR Bands all on one chart window.
The Average True Range (ATR) indicator is a technical tool that is useful in gauging volatility, while the Bollinger Bands is based on standard deviation that changes in tune with increasing and decreasing volatility.
The ATR Bands is deployed as a trend following indicator and can be used to spot reversals in tune with channel breakouts and channel direction. The Bollinger Bands will contract and widen as price action of a symbol becomes tight (contract) or exhibit a volatile (widen) trading pattern.
The Bollinger Bands is enveloped in the ATR Bands and reacts quicker to price changes i.e. the ATR band acts alike a filter in this regards. The toptahlil_bollinger_and_atr_band is used to spot and follow market trends.
Both the Bollinger and ATR Bands have the Exponential Moving Average as its core, thus enabling the toptahlil_bollinger_and_atr_band indicator act as a trend following indicator.
The setup of the toptahlil_bollinger_and_atr_band indicator allows the Bollinger Band react quicker to price movement. An uptrend is present is present when the channel moves higher, while a downtrend is present when the channel moves south.
The trend is said to be flat when the channel moves sideways. The Bollinger Bands are represented by the blue dotted lines, while the ATR Bands are represented by the red out bands.
Notice from the setup of the toptahlil_bollinger_and_atr_band indicator that during price breakout following contractions of the bands, if price breaks towards any of the Bollinger Bands (lower or upper band), price will favor the direction that it tested first.
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart pattern indicator
Customization options: Variable (ATRMult, ATR_Period, Band_Period, Band_Diviations, Band_Shift, Band_ApplyPrice), Colors, width & Style.
Time frames: 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Type: pattern, trend