The bb alert indicator for binary options. Break-even strategy using martingale
Based on the Moving Average Convergence / Divergence (MACD) indicator, many technical analysis tools have been created. Typically, they are designed to be used in a specific environment, delivering more efficient and reliable signals than the prototype. This article will discuss in detail the indicator BB MACD, which is not only calculated by the modified algorithm, but also displayed on the price chart in an original way.
As the name suggests, this indicator is a symbiosis of MACD and Bollinger Bonds. Therefore, it combines all their advantages, but the disadvantages of each of them are almost completely mutually compensated. As a result, the trader receives reliable information about the current trend (including the moments of its change) and the current volatility, on the basis of which the most optimal points of entry into the market can be determined.
The appearance of the MACD BB indicator
After its installation on the quotes chart, a basement window is formed, in which two solid curves and one discontinuous one, made up of circles, are displayed. In this case, the solid lines are one-color, and the circles of the broken curve can have two different colors (Fig. 1). But in order to install MACD BB on the chart, you will first need to download indicator file and place it in the MQL4 / Indicators folder localized in the terminal data directory. Then either MetaTrader is restarted, or the Navigator window is updated.
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The solid blue and red curves form a channel that is functionally equivalent to the Bollinger Bands. That is, the greater the vertical distance between these curves (the wider the channel), the higher the volatility of quotes in a given time period (the more the price changes per unit of time). Accordingly, a decrease in the channel width indicates the formation of a flat, correction or consolidation in the market.
A dashed dotted curve is equivalent to the main MACD line, but it is calculated and plotted relative to the boundaries of the formed channel. Moreover, if the current point is located closer to the red border than to the blue (in relative units), then its color will be pink. Otherwise, it turns green.
Interpretation of signals of the BB MACD indicator
One of the signals is the intersection of the broken dotted MACD curve of the channel border. It indicates the direction in which to open a position:
- if the intersection is at the upper border, then you can buy;
- if the intersection was formed at the lower border, then you can sell.
Another signal is a change in the color of the points of the discontinuous MACD curve, which also indicates the direction of opening a position:
- if the color has changed from pink to green, then you can buy;
- if the color has changed from green to pink, then you can sell.
And the third signal, which is the vertical distance between the blue and red solid curves, has already been described above (if it increases, then volatility increases, and vice versa).
MACD BB indicator settings
In order for all the described signals to be as reliable as possible, it is necessary to set the correct values for the indicator input parameters. There are 5 parameters in total (Fig. 2):
- FastLen - settlement period fast EMA;
- SlowLen - slow EMA calculation period;
- Lenght - calculation period of the central MA;
- StDv - multiplier for setting the degree of expansion or contraction of the channel when the market volatility changes (respectively, decreases or increases);
- barsCount - length (in bars) of the time interval on which the indicator is calculated.
The first two variables (FastLen and SlowLen) are used to calculate the discontinuous dotted MACD curve. Recall that it is the arithmetic difference
The next two variables (Lenght and StDv) are used when calculating the Bollinger Bands. The default values of these parameters are optimal for timeframes no shorter than M30.
The last variable does not affect the calculation results (but its value should be several times larger than the longest calculation period).
How to trade BB MACD indicator signals
Since the technical analysis tool under consideration is based on two indicators, one of them should be used as a generator of trading signals (this is the MACD dotted curve), and the other as a generator of confirmation signals (this is the BB channel). Thus, buy signals are:
- changing the color of the dots from pink to green;
- the pink dots reach the blue border of the channel.
Sell signals are:
- changing the color of the dots from green to pink;
- the green dots reach the red border of the channel.
A trader can use either one of these signals or both.
In this case, the confirmation of the truth of these trading signals is their occurrence during the expansion of the BB channel. If such signals are formed on a narrow part of the channel or during its narrowing, then it is better to refuse to make deals. Thus, the channel width is a filter for MACD, which, as you know, gives a lot of false signals on a flat (Fig. 3).
It should be noted that the generated signals show only the points of entry into the market. Therefore, the trader must additionally determine the levels of placing stop orders (Take Profit and Stop Loss). In the simplest case, you can constantly be in the market (but only during periods of sufficient volatility), reversing the position when opposite trading signals appear. Alternatively, you can open a position on a signal of one type and close it on a signal of another type.
In the example in Fig. 4, blue straight lines are drawn through the candles on which the above conditions are met. At the opening of the next candles, it was possible to enter the market. In the first case, the pink dot crossed the lower border of the channel during its expansion, so a sale was made. This trade was closed at the formation of the first green point at a small loss. In the second case, a green dot formed on the channel extension after the pink one, so a purchase was made. This trade was closed when a pink dot appeared with a profit several times greater than the previous loss. White straight lines are drawn through the candles where positions were closed.
In fig. 5 shows an example of another profitable trade. First, the green MACD circles reach the upper boundary of the BB, after which the channel expansion begins. Therefore, you can open a position no earlier than on the blue line marked on the candlestick. A trade is closed on a candlestick through which a white straight line was drawn (the color of the MACD circles on it has changed).
Rice. 5 also demonstrates the lagging of the BB MACD signals. As a result, less than half of the potential profit was obtained from the formed upward movement. This delay can be leveled by selecting the parameter values and optimizing the entry and exit points.
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The Super BB MACD SSA system is designed for Forex trading and is based on the SSA (Singular Spectrum Analysis) method. In the Russian community, the method is often called Caterpillar (a domestic version of the SSA method). The method consists in analyzing the time series and separating the high-frequency component (noise) from the low-frequency one. There are parallels to Fourier transform filters, but the math is different. The results can be used to analyze the current market situation and the general trend.
This system can be used to intraday trading on charts from 5 minutes to 1 hour and for medium-term, on H4 and daily charts. The system quite accurately determines the impulses and reversals of the market, therefore, it can be used, in addition to currency pairs, for trading metals and commodities. Such trading will require bank brokers.
The system consists of several indicators modified by the SSA method and an improved MACD indicator. “BB MACD” is a combination of the Moving Average Convergence Divergence (MACD) indicator with Bollinger bands, which helps to determine the points of change in the direction of the trend, as well as the strength of the current trend. The indicator is drawn in the lower terminal window, consists of two white lines and dots, which can be either pink or lilac. A change in the color of the points indicates a change in the local trend, while the width of the gap between the lines indicates the strength of the trend.
For the system to work correctly, you need to place the libSSA file in the Libraries folder. This file, as well as indicators and system template, can be found in the archive at the link at the bottom of the article.
On the main chart, the TTM Ssa Bars indicator paints the bars blue or purple, depending on the direction. The "Bt stop ssa" indicator displays the current support and resistance levels and the prevailing direction in the same colors. The PivotsD v5 indicator helps to identify important levels on higher timeframes during intraday trading.
This picture shows a sample of opening a buy position. First, the “BB MACD” indicator turned lilac, then the points of the “Bt stop ssa” indicator turned blue. The position is opened on the blue bar of the "TTM Ssa Bars" indicator. The widening of the range of white lines confirms the strength of the trend. The stop loss is set below the local minimum and the position is closed after the “BB MACD” indicator color changes to pink.
Here is an example of opening a sell position. First, the “BB MACD” indicator turned pink, then the points of the “Bt stop ssa” indicator turned purple. The position is opened on the purple bar of the "TTM Ssa Bars" indicator. The stop loss is set above the local minimum, and the position is closed after the “BB MACD” indicator color changes to lilac.
If the colors of the indicators do not match and the white lines of the “BB MACD” indicator approach each other, you should not open positions.
From the article you will learn:
Good evening everyone, dear readers and blog visitors! In this article, we will look at new indicator called BB MACD. This is not a standard and familiar version of the indicator; this is already something new.
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Already from the name you might have guessed that we have a mixture in one person. The decision of the authors themselves to create such an instrument involuntarily arouses a certain curiosity.
For me personally, it initially became a little incomprehensible to me how it is possible to enclose two such, at first glance, different indicators in one instrument. Nevertheless, this approach does make sense, and if used correctly, it can give itself quite a positive result.
But, again, one should not think that this indicator is the grail, which will always and everywhere give positive results. It is just a trading tool that has its own distinctive advantages and disadvantages.
Roughly speaking, this indicator can become a worthy addition to your trading system, but I do not recommend you to use it on its own, as it will not lead to anything positive.
Description of the BB MACD indicator
Everyone knows perfectly well that the standard version of the MACD indicator is displayed on the price chart as a kind of histogram, but here is a completely different story. Look at the picture!
We see that we have before us a basement indicator, which represents points that change their color taking into account the market movement, and move between certain ones.
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I would like to point out a remarkable fact that this indicator is quite good. has established itself as a scalping tool... For a long time I watched him work on the EURUSD chart on the M5 interval, and, in fairness, I note that he gives very good signals, especially if you do not pursue huge goals for taking profit.
In general, if you correctly enter this indicator into the system, then you can get hold of a quite good filter, which will make it possible to earn stable income. But, again, using it on your own is a very risky business.
You can use this indicator on almost all time intervals, but I personally found the M5 interval to be the most suitable. But, it is very difficult to give any specific advice here, because everything will be directly determined by the concept of your trading system.
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As I said earlier, this indicator is a hybrid of Bollinger Bands and MACD, and as it turns out, it really makes sense. The indicator points represent the MACD readings and the lines represent the Bollinger bands.
As you know, MACD is in many ways a trend indicator, and all instruments of this kind behave unstably in time. The fact is that they are lagging behind the price, and react in slow motion to changes. market conditions.
Roughly speaking, a reversal can already take place, and the indicator itself will point to it only after a while.
Thus, the trader will already be forced to enter the market at a price that is not entirely profitable for himself, which, naturally, will negatively affect the final result.
MACD just has this drawback, that is, there was an urgent need for a filter that could indicate the presence of a flat in market conditions. As we know, BB does an excellent job with this task, and therefore it was decided to implement this indicator.
Roughly speaking, if we see a narrowing of the bands, then this is a clear sign of a flat, and in this case it is better not to trade. If the bands widen, then this is a direct indicator of an increasing one, and you can safely trade.
Trading examples on BB MACD
Now is the time to consider potential trade examples to make it clearer for you how to apply BB MACD in practice.
Here is a good moment when one could enter shopping. To begin with, we have a green dot indicating an uptrend is developing. In addition, we see that the BB lines are expanding, which means that the trend is gaining strength.
Considering the fact that in the example we are using a low interval, it was possible to take your own 10-15 points and close the position with a profit. That is, the position worked perfectly.
And here already good example for sales. We see that the point has repainted in the appropriate color, and at the same time the distance between the bands is large enough, which indicates to us decent volatility.
If a trader had opened a trading position here, he would have received a good profit. In general, the signal worked out excellently. But, again, do not naively assume that absolutely everything trading signals will close with a profit!
Take a close look at the picture above! We see that at this moment the indicator readings are changing, but the bands are very close to each other. This is a direct sign of the development of consolidation, and at such moments, you should never open trading positions.
Accordingly, try to trade during the period and the first hours when market volatility is highest. But, again, everything here specifically depends on you and your trading system.
conclusions
I think this indicator is really interesting and can be a worthy addition to. I especially want to point out that he does not redraw his readings.
That is, if a signal appears and the price moves in the opposite direction, it will still remain. Accordingly, the performance of the indicator can be preliminarily assessed using history.
You can try using this indicator considering the global trend. For example, if the global trend is buy, then the corresponding positions should be considered. In short, there are a lot of options!
- made this complex indicator, with arrows - BB for RSI... Now you don't have to worry about setting up one indicator in another, and you can customize everything within one settings window.
The indicator marks the places with arrows - the intersection of the BB levels by the RSi indicator, for purchases the lower level - from bottom to top, for sales - the upper level - from top to bottom. If you need any other places / levels / signals - write.
There is a disabled ability to draw both arrows and vertical lines in the places of the proposed entrances. In the settings, you can choose - on which candle - to look for an entry - on the first (already drawn) or on the zero one - the one that is drawn (signals may disappear).
The indicator works only on the terminal Metatrader 4.
Indicator settings:
RSI Period- Period of the RSI indicator.
Max signal level- Overbought level of the RSI indicator.
Min signal level- The oversold level of the RSI indicator.
RSI color- The color of the RSI indicator.
RSI width- Line thickness of the RSI indicator.
BB Period- The period of the Bollinger Bands indicator.
Bb deviation- Deviation of the Bollinger Bands indicator.
BB Color- The color of the Bollinger Bands indicator line.
BB Width- Line thickness of the Bollinger Bands indicator.
BB line style- Bollinger Bands indicator line style.
Candle which look for the signal (0 = current candle)- from which candle to take signals, = 1 - from the first, = 0 - from zero.
Show vertical lines- draw vertical lines, = false - disables this function.
Show arrows- draw arrows, = false - disables this function.
Creating your own trading strategy is a lot like playing a constructor game, where each cube has its own task, and their common whole creates a coherent structure.
When creating a strategy, you, as a trader, combine all the positive qualities of certain indicators and at the same time overlap the negative ones, which in general will help you achieve your goals.
However, the overwhelming majority of beginners begin, to put it mildly, to exaggerate the importance of having various indicators in a strategy, so we can see cluttered charts with dozens of necessary and unnecessary indicators.
This is especially noticeable when a trader is trying to create trading strategy from standard indicators, where, as a rule, 1 indicator is responsible for one direction.
Actually, in order to avoid unnecessary overload of the working chart, it is necessary to use custom indicators that combine the properties of 2-3 standard instruments.
The BB MACD indicator is a tool technical analysis, which combines the properties of two of the most popular indicators among the trader community, namely MACD and Bollinger Bands.
Looking at this indicator for the first time, you can't even say that it contains MACD, but if you connect these two instruments on the chart and look at their signals, in most cases they will be identical, but occur simultaneously.
The tool can be used on any currency pair and any time frame, but due to the obvious trend component of the indicator, the best time frames for BB MACD are 30-minute and hourly charts.
Installing BB MACD
BB MACD is a custom indicator that will never be found by default in any trading platform. Therefore, in order to apply it, you must first download the file itself at the end of the article and install it in trading platform MT4. To do this, enter the open platform in the file menu and start the data directory.
Entering this directory, you get access to the system folders of the platform, so we drop our previously downloaded indicator into the indicators folder.
To make the tool appear in the list of custom indicators, you just need to restart the terminal or update the files in the "navigator" panel. After installation, drag the instrument onto the chart.
Indicator signals
As already mentioned, BB MACD has absorbed important features of two indicators, namely MACD and Bollinger Bands. The indicator took the feature from the Bollinger Bands to measure market volatility and trend strength. To do this, the indicator has two lines of red and blue, which create a kind of channel.
If you see a wide channel, you have a strong trend with high volatility. If the channel from the indicator lines has narrowed a lot, the trend has moved into a sluggish current stage and has a sideways character.
However, you must clearly understand any compression of the channel leads to a strong surge, as is the case with a spring, if you try to compress it as much as possible. Therefore, a narrow channel should warn you of an imminent strong surge, and not a weak trend.
The second type of signal is based on the principle of using MACD, namely the crossing of the 0.00 level by the points. It is considered if the points are above the signal line - the global uptrend. If the points are below the signal line, the global trend is downtrend.
Actually, when the global trend changes, the position is entered, namely, if the point appears above level 0, we buy, and if the point appears below level 0, we sell. See an example below:
The third type of signal is based on the points of the indicator itself. Every trader knows that in addition to the global trend, there is a so-called micro trend in the market, which, in the aggregate of its movements, gives an overall picture.