BB Alert Arrows indicator for binary options. BB Alert Arrows indicator - description and settings BB MACD signals
It is rightfully considered one of the most informative and effective on Forex, but it has one drawback - it is not very suitable for the role of an identifier for flat states. Given this circumstance, the programmers decided to create BB MACD indicator- combination " moving average Convergence Divergence" and "Bollinger Bands".
Before proceeding to the description of trading techniques using the BB MACD indicator, let's recall the main features, the formulas of which were borrowed to calculate this modified instrument.
You can download this technical indicator right here:
In the MetaTrader4 terminal, MACD is displayed in a separate basement window and is calculated as follows:
- First, the difference between two moving averages (MA) built for different periods is determined (the result is displayed as a histogram);
- Then, based on the obtained values, another moving average is built.
It should be noted that in classic exchange terminals (other than MT4) the method of calculating and constructing MACD is slightly different. However, today we will not focus on such nuances, since the BB MACD takes into account the values of the "forex" version.
The BB MACD indicator is a combination of the above formulas, in particular, it is calculated according to the following scheme:
- First, key MACD values are determined;
- Then Bollinger Bands are built on the basis of the obtained values.
Of course, the settings of the considered expert will contain exactly the same variables as the original indicators, in particular, the developers left the user the opportunity to edit the following parameters:
- FastLen - fast MA period;
- SlowLen - slow MA period;
- Length - period of the smoothing moving average (its values are the final ones when calculating MACD);
- StDv - the number of standard deviations to determine the range of the BB channel (this is the same coefficient from the description of Bollinger Bands).
Thus, this tool allows you to evaluate the dynamics of the standard deviation of the MACD histogram from its average value. It follows that the Length variable must always be greater than one, because otherwise the Expert Advisor simply will not have data for calculations.
I would like to pay special attention to the graphical representation of BB MACD. As you can see, it is presented as a scatter plot, the color of which changes depending on the direction of the trend:
- Green dots correspond to an uptrend;
- Pink dots appear in a bear market;
- The upper and lower boundaries of the Bollinger channel are colored blue and red, respectively.
How to use the BB MACD indicator in Forex
The considered combination of standard functions effectively solves several problems at once. For example, it can be used to estimate the direction of the current price impulse (this is already obvious).
If this method seems unreliable due to the large amount of noise, the trend on the BB MACD indicator can be determined by the location of its main points. For example, if they are above zero, the bulls are stronger than the sellers; if they are lower, the bears have prevailed over the buyers.
The question here is only in the specific parameters of the system, since they will depend on the timeframe, the duration of the "quotation period" of the asset and other nuances to which the BB MACD indicator is not directly related.
The next strategy already uses combined signals, the thing is that this EA is quite good at identifying market segments.
The chart above shows one of such examples, as you can see, during a flat, the range between the BB lines begins to rapidly decrease, therefore, as soon as such a formation appears, you can bet on an early exit of the asset from the range.
By the way, adhering to the same logic, it is possible to determine the strength of the trend with high accuracy:
- if the distance between the channel lines increases, the movement accelerates, so it is better to work strictly according to the trend;
- if the channel range is shrinking, the momentum is weakening, which means that cautious counter-trend trades are appropriate.
In general, the result of the analysis based on the BB MACD indicator practically does not differ from the signals of the original algorithms taken as its basis, but one cannot but note the fact that in this case the entry points are identified with less delay.
Creating your own trading strategy is in many ways reminiscent of a game of building blocks, where each cube has its own task, and their common whole creates an integral structure.
By creating a strategy, as a trader, you 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 vast majority of beginners begin, to put it mildly, to exaggerate the importance of having various indicators in the 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 trading 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, then in most cases they will be identical, but appear simultaneously.
You can use the tool 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 thirty-minute and hourly charts.
Setting the BB MACD
BB MACD is a custom indicator that you will never find 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 the MT4 trading platform. To do this, enter the open platform in the file menu and start the data directory.
By entering this directory, you get access to the system folders of the platform, so we drop our previously downloaded indicator into the indicators folder.
In order for the tool to appear in the list of custom indicators, simply restart the terminal or update files in the "navigator" panel. Actually, after installation, we 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. From Bollinger Bands, the indicator took the feature of measuring market volatility and trend strength. To do this, the indicator has two red and blue lines that create a kind of channel.
If you see a wide channel, you have a strong trend with a lot of volatility. If the channel from the indicator lines has narrowed significantly, 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 of a weak trend.
The second type of signal occurs according to the principle of using the MACD, namely, the crossing of the 0.00 level by dots. It is considered that if the dots are above the signal line, the global trend is up. If the dots are below the signal line, the global trend is down.
Actually, when the global trend changes, a position is entered, namely, if the point appears above the 0 level, we buy, and if the point appears below the 0 level, we sell. See an example below:
The third type of signal is based on the dots of the indicator itself. Every trader knows that in addition to the global trend, there is a so-called micro trend on the market, which, in the aggregate of its movements, gives an overall picture.
The Bollinger Bands %B indicator is a complete analog of the classic Bollinger Bands, but with the difference that in this case the indicator is transferred to a line chart and even looks like an oscillator.
Description of the indicator
What are Bollinger bands b? To answer this question, I suggest taking a look at the figure below.
Classic bands are plotted on the chart itself, and below -% B. Please note that both indicators show absolutely identical values - the moments when the price goes out of the envelope. This is the essence of the indicator as a whole, and if we talk about its new interpretation, the essence is to save the trader from the painful search for exit points when they are hard to see. Indeed, in a separate window and in the form of a line graph, everything is much clearer.
Bollinger Bands and consist of the following elements:
- The line itself
- Level 1.0 - corresponds to the upper line of the classic indicator.
- Level 0.0 - corresponds to the lower line of the classic indicator.
As a result, we can say that we are dealing with classic Bollinger Bands, which are simply expressed in a slightly different graphical form. Therefore, the same methods will be used as application methods in practice. More about them -.
Practical use
Speaking of the main practical application of this indicator, then it consists in working with overbought (above 1.0) and oversold (below 0.0) zones, as with oscillators and is identical for the forex market and for binary options. In the general case, we can say that if the indicator rose above 1.0, we consider short deals in the future. If the indicator falls below 0.0, we are looking for an opportunity to open a buy position. 
Even this figure clearly shows the limitations that need to be taken into account. From the classical theory of technical analysis, we remember that the deviation 2 of the Bollinger bands is quite dangerous, since the price will often test its boundaries and break through them periodically. Therefore, the basic settings will more often be used for short-term trading or scalping. An increase in the deviation will reduce the number of signals, but will allow you to open deals for a longer time and hope for a more impulsive movement. 
Even from the above examples it is clear that Bollinger Bands %B is a very visual tool, which attracts traders, but remember that it is no different from the classic BB.
Hello dear blog guests, today I decided to tell you about the BB MACD indicator. Already from the name it becomes clear that this tool is an improved version of the well-known indicator. Our today's hero is easy to use and highly effective.
BB MACD belongs to the category of trend tools, it allows you to identify trend reversal points, measure the strength of a trend and identify market consolidation.
Description of the BB MACD indicator
Unlike its predecessor, the BB MACD indicator has a channel consisting of two curves. This channel is designed to determine the price direction. If the channel lines are located close to each other, then this indicates a range.
A range is the absence of a trend, when the price seems to be “marking time” on the spot.
If the channel expands, this indicates the emergence of a trend. The faster the channel expands, the stronger the emerging trend. If the channel begins to narrow, this indicates that the trend is weakening in the market.
In the following picture, you can see an example of the markup of the indicator during high and low market activity.
The BB MACD indicator also draws dots of two colors: lilac and green, which suggest which order is best to open at the moment. Lilac dots indicate that it is time to sell, and green dots indicate that it is time to buy.
You can download the BB MACD indicator from the link below.
Its installation is carried out according to the standard scheme. Save the downloaded archive to the data directory of your trading platform and then restart it. Then choose a suitable currency pair and transfer the indicator to it from the Navigator window.
Setting the BB MACD
After transferring the indicator to the chart, you will see the same window as in the picture below.
In the "Inputs" tab, you can see the standard indicator settings, which mean the following:
- Fast Len - this line indicates the period for the fast moving average.
- Slow Len - here you can specify the period for the slow moving average. In this line, the value must always be greater than in the previous one.
- Length - here you specify the period for determining the standard deviation.
- Bars Count - here you specify the number of candles from the history on which the indicator will display its data.
- St. Dv. - here you specify the coefficient for plotting the standard deviation compared to moving averages. This parameter should be given special attention, since a lot depends on it. You can experiment with this value and achieve high efficiency. So, for example, by specifying the value 20 in this line, the indicator will clearly determine the flat in the market and the moments of exit from it.
You can see how the BB MACD indicator looks like in action in the photo below.
This algorithm can be used both in Metatrader 4 and Metatrader 5.
BB MACD Signals
The BB MACD indicator optimally combines distinctive features the tools included in it. Thanks to the inclusion of the Bollinger Bands tool in its composition, this indicator is able to quite accurately identify the strength of the existing trend, as well as the level of market volatility. To reflect the parameters described above, the tool is provided with two curves that have a blue and a red tint. Using these curves, the tool creates a kind of channel.
In situations where the channel created by the curves of the instrument has a large width, this is evidence of the presence of a high level of volatility and a strong trend in the market. The narrowing of the channel described above is a signal of the trend or flat attenuation.
Practice shows that a strong compression of the channel precedes a strong jump price level. This feature must be taken into account when bidding.
The second type of signals that this algorithm produces is the intersection of points with a zero mark. If, after crossing, the points are placed above the zero level, then this indicates a global upward trend. If they are placed below the zero level, this indicates a downtrend.
The third type of signals is indicator points. Any experienced trader knows that in addition to the global trend, there are corrections in the market that make the price roll back from the main movement.
If there is a trend in the market for a long time, corrections are short-term. Our today's hero shows with the help of correction points. If there is a stable uptrend on the market, and the indicator draws a purple dot, this indicates a correction.
Rules for using the indicator in trading
The creators of the indicator advise using it on long time intervals. The larger the time frame, the more reliable the generated signals are.
- If the channel of two curves began to expand.
- The indicator began to draw green dots.
- The channel began to expand.
- The indicator began to draw purple dots.
It is worth exiting the market when the channel starts narrowing or when the indicator starts drawing dots of a different color.
To filter out false signals, the BB MACD indicator is recommended to be used in conjunction with an exponential moving average with a period of 14.
The signals generated by the BB MACD indicator are recommended to be filtered out depending on the location of the price level relative to the moving average. It is recommended to open buy deals only when the price is above the exponential moving average, and we create sell deals only when the price is below the exponential moving average.
With the help of these tools, you can create a very effective trading strategy, if, in addition, you follow the rules of money management.
In the next figure, you can see the same indicator, but with the value 20 in the St.Dv line.
Thus, the indicator allows you to filter out the flat. This tool is perfect for beginners in the Forex market due to the fact that it is easy to set up and use. Using this algorithm, it is easy to follow the market, as the visibility of the instrument is at its best. The BB MACD indicator reflects the current market situation much better than its predecessor MACD.
Indicator BB MACD, as the name implies, is a modification of the famous MACD oscillator. It is easy to use, it has a good, unambiguous visual indication, so it is convenient to use it.
BB MACD is trend indicator, which allows you to find market reversal points, determine the strength of the trend, identify the flat.
Free download You can find this algorithm here:
Distinctive features of BB MACD
In this algorithm, a channel of two lines, upper and lower, is added. This channel shows whether the market is moving up, down, or sideways. If the lines are narrowed, are close to each other or even parallel, we have a range. If the lines diverge in opposite directions (upper up, lower down), we get the beginning of an upward or downward movement.
The more the lines move away from each other, the stronger the current market trend manifests itself. Similarly, when the lines converge, the uptrend or downtrend fades.
The central line in the form of dots shows a change in the direction of the trend. Everything is elementary:
- lilac dots - sell;
- green dots - buy.
The BB MACD oscillator does not have a large number of different settings. Although it has more variables than MACD, it is quite convenient to work with it.
- FastLen – the period for constructing a "fast" average (default value is 12).
- SlowLen - here you enter the value for the "slow" average (default 26).
- Length - the period for calculating the mean and standard deviation (usually 10 is used).
- BarsCount - the number in this field determines how deep in the history to build the indicator, that is, how many bars or candles back the algorithm will be displayed (default 400).
- St. Dv. (standard deviation) – coefficient for displaying the standard deviation indicator in comparison with the moving average (usually 2.5). This parameter should be given special attention, since by changing its value, you can get good indicative results. Experiment with St.Dv., for example, a value of 20 gives a good indication of the period of consolidation or exit from it.
The appearance of the indicator is shown in the illustration below. The developers have provided two versions of the BB MACD, written in the mql4 and mql5 programming languages, so it can be used in both MetaTrader 4 and MetaTrader 5 versions.
BB MACD indicator signals
The previous illustration shows currency pair AUDNZD on the 4 hour timeframe. The higher the time span used, the higher the reliability of the signal. Default settings selected.
Tip: if you have changed the settings and forgot which ones were used by the developers, you should click on the "reset" button in the settings window to roll back all changes.
The change of colors from lilac to green signals a change in the direction of the market movement. Convergence and divergence of lines give us information about current situation on the chart, whether to plan buying or selling.
Reviews of the other two oscillators:
Conditions for concluding a Sell deal:
- The upper and lower boundaries of the channel are located close to each other and begin to move away equally.
- The middle line has changed coloring to lilac.
- Channel deviation lines are close or parallel.
- The center line is green.
By adding MA14 to the chart, we take buy signals only when the price rises above the "mask". The conditions for selling are opposite: when the price fixes below the middle line, we consider the possibility of concluding a sell deal. Based on these two indicators, you can build a good trading strategy by screwing a well-tuned money management.
Another shot of the same instrument but with St.Dv settings. = 20.
The BB MACD indicator can be advised to novice traders looking for a simple, but at the same time convenient and informative oscillator. With its help, it is easy to follow the market, as the visibility of the indicator is excellent. The introduction of a deviation channel into the program code is an excellent decision by the authors of the algorithm, which increases the efficiency of the software product.
