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MACD Bollinger Bands (MACD BB)

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Bollinger Bands are a technical trading tool created by John Bollinger in the early 1980s. They arose from the need for adaptive trading bands and the observation that volatility was dynamic, not static as was widely believed at the time.

In the MACD Bollinger Bands adaptation, the purpose of the MACD Bollinger Bands is to provide a relative definition of high and low levels of the MACD averages themselves, similar to how they are adapted the regular market. By definition prices are high at the upper band and low at the lower band. This definition can aid in rigorous pattern recognition and is useful in comparing price action to the action of indicators to arrive at systematic trading decisions.


Buy/Sell Signals

If the MACD Average travels outside the Bollinger Bands either way, that's a signal. A sell signal happens when the MACD Average goes below the band. A buy signal happens when the MACD Average goes above the band.

This is much easier to see if the MACD Average is in line mode.

Example of the MACD Bollinger Bands in the Indicator Window


Open the Preference tab from the Control Panel on the left of your screen. Select the Bollinger Bands line on your screen. The preferences will appear in the Control Panel. (Once you click on the chart, the Preference tab will go back to chart settings.)

MACD - Bollinger Bands:

Period - To specify the number of days used in calculating the indicator, click in the box, highlight the number, and type in a new value.
Std Dev. - Defines the displacement between the Bollinger Bands. Click in the box, highlight the number and type a new value to change the displacement.
Change the color, line style, and line thickness of the MACD - Bollinger Bands.