Case Study: Bollinger Bands as a blocker

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WHS Support
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Joined: 14 Feb 2013 10:27

Case Study: Bollinger Bands as a blocker

Post by WHS Support »

Dear Trader,

in the past our Support Desk has developed various indicator solutions for customers. In order to make these solutions available for more users we decided to post these case studies here in the forum. We hope that the one or the other approach will help you and might give you an idea of what is possible. Of course please feel free to post your own problems and/or solutions.

A position should be opened if the close price crosses above the upper or below the lower Bollinger Band but only in case the market is also volatile meanwhile.

Possible solution:
The generation of a signal by using the Bollinger Bands is quite simple and needs only the standard Bollinger Bands indicator to be added to the chart as a Sentimentor. The only problem was the requested condition of a strong price movement at the time the signal is generated.
Since we are already working with the Bollinger Bands indicator it was the idea to find a solution by also using the Standard deviation by which the Bollinger Bands are also constructed.

The value of the standard deviation can be easily calculated by a pre-defined Express function and then used as volatility blocker by a user-defined threshold level.

As long as the standard deviation does not exceed the threshold level of 20, all trading signals and automatically generated trades are blocked (purple chart background). Once the standard deviation exceeds the threshold level of 20, the blocker will be canceled and all trading signals and automatically generated trades are allowed (white chart background).

In order to use this blocker please copy the attached file in your local FutureStation > DefaultDys folder (can be find usually under My Documents \ WHS FutureStation Nano \ Default Dys). After updating the platform you can open this blocker as a template study.

Kind regards,
WH SelfInvest
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