How to Add Bollinger Bands Indicator on MetaTrader 4 Charts
Step 1: Open Navigator Window Panel on Forex Trading Platform
Open Navigator window as shown & illustrated below: Go to "View" menu (click on it), then select "Navigator" window (click), or From Standard Tool Bar click the "Navigator" button or press keyboard short cut keys "Ctrl+N"
On Navigator window, select 'Technical Indicators', (DoubleClick)
How to Add Bollinger Bands Indicator on MetaTrader 4 - MT4 Bollinger Bands Technical Indicator
Step 2: Expand the Indicators Menu on the Navigator - Adding Bollinger Bands MT4 Indicator
Expand the menu by clicking the expand button marker (+) or double click the "indicators" menu, after this the button will appear as (-) and will now display a list as shown below - select the Bollinger Bands forex chart indicator from this list of forex indicators so that to add the Bollinger Bands indicator on the forex chart.
How to Add Bollinger Bands Indicator - From the Above window you can then place Bollinger Bands indicator that you want on the Forex chart
How to Add Custom Bollinger Band Indicator to MT4
If the technical indicator you want to add is a custom indicator - for example if the Bollinger Bands technical indicator you want to add is a custom indicator you will need to first add this custom Bollinger Bands indicator on the MetaTrader 4 platform & then compile custom Bollinger Bands indicator so that the newly added Bollinger Bands custom indicator pops up on the list of custom indicators in MetaTrader 4 software.
To learn how to install Bollinger Bands indicators on MT4, how to add Bollinger Bands indicator window to MT4 and how to add Bollinger Bands custom indicator in MT4 - How to add a custom Bollinger Band forex indicator in MetaTrader 4.
About Bollinger Bands Technical Indicator Tutorial Explained
Bollinger Bands Technical Analysis & Bollinger Bands Signals
Developed by John Bollinger
Bollinger bands are formed by 3 lines. The middle line is a Moving Average - 20 period Simple Moving Average.
The bands are then plotted at a distance away from the moving average These are the bands that form the lower and upper lines.
The distance where the bands are plotted is determined by another indicator called the standard deviation. Standard deviation is a measure of volatility in the forex market or that of a currency pair.
Since the market volatility keeps on changing, the standard deviation will keep varying, and since Bollinger bands are plotted using the standard deviation the distance of the bands will keep on adjusting themselves to the market conditions.
When the markets become more volatile, the bands widen and they contract during less volatile periods.
The 3 Bands are designed to encompass the majority of a forex currency price action. The middle band forms the basis for the trend, typically a 20-periods simple moving average.
This band also serves as the base for the upper and lower bands. The upper band's and lower band's distance from the middle band is determined by volatility. The upper band is plotted at +2 standard deviations above the middle band while the lower band is plotted at -2 standard deviations below the middle band.
Forex Technical Analysis & Generating FX Signals
- Bands provide a relative definition of high & low
- Used to identify periods of high and low volatility
- Used to identify periods when prices are at extreme levels
Consolidation - the Squeeze
The bands tighten as volatility lessens, this identifies periods of consolidation. Sharp price break-outs tend to occur after the bands tighten.
Consolidation Pattern
Continuation Forex Trading Signal - the Bulge
If prices break through the upper or lower band move outside the bands a continuation of the current trend is expected.
Reversal FX Trading Signals - Double Tops and Double Bottom Trading Patterns
Bottoms & tops made outside the bands followed by bottoms & tops made inside the bands call for reversals in the trend
The Head Fake - FX Trading Whipsaw
Forex traders should be on the lookout for false breakouts known as whipsaws or head fakes.
Price often breaks out in one direction immediately following the Squeeze causing many traders to think the breakout will continue in that direction, only to quickly reverse and make the true, more significant breakout in opposite direction.
Traders acting quickly on the initial breakout often get caught on the wrong side of the price action, while those traders expecting a "false breakout" can quickly close out their original position and enter a trade in the direction of the reversal. It is always good to combine Bollinger bands with other confirmation Indicators.
