How to Set Bollinger Band on MT4 Charts

Step 1: Open Navigator Panel on Platform Software

Open the Navigator panel like is shown & displayed below: Go to "View" menu (press on it), then choose & select the "Navigator" window (press), or From Standard Tool Bar click "Navigator" button or press key board short cut keys "Ctrl+N"

On Navigator panel, choose 'Indicators', (Double-Click)

How Do I Add Bollinger Band on the MT4 Software - MT4 Bollinger Band Indicator

Step 2: Expand the Indicators Menu on the Navigator - Adding Bollinger Band MT4 Indicator

Expand the menu by clicking the expound button/tool initial ( + ) or double click the "indicators" menu, & after which this button will be shown as (-) & will now display a list just as illustrated and shown below - choose the Bollinger Band chart indicator from this list of indicators so that to add the Bollinger Band on the chart.

How Do I Add Bollinger Band - From the Above window you as a trader can then place Bollinger Band that you want on the chart

How to Set Custom Bollinger Bands Indicator to MT4

If the technical indicator you want to add is a custom indicator - for example if the Bollinger Band you as a trader want to add is a custom indicator you'll need to first add this custom Bollinger Band on the MetaTrader 4 software & then compile the custom Bollinger Band so that the newly added Bollinger Band custom indicator pops up on the list of custom indicators in MT4 software.

To learn and know how to install Bollinger Band indicators in MT4 Platform, how to add Bollinger Band window to MT4 and how to add Bollinger Band custom indicator in the MT4 Software - How Do I add a custom Bollinger Bands forex indicator on MT4 Platform.

About Bollinger Band Tutorial Explained

Bollinger Bands Analysis and Bollinger Bands Signals

Developed by John Bollinger

Bollinger Bands are formed by three lines. The middle line is a MA(Moving Average) - 20 period Simple MA.

The bands are then plotted at a distance away from the MA These are the bands which form the lower and upper lines.

The distance where the bands are plotted is determined by another technical indicator called the standard deviation. Standard deviation is a gauge and measure of volatility in the market or that of a forex currency pair.

Since the price volatility keeps on changing, the standard deviation will keep fluctuating, and since Bollinger bands are drawn using the standard deviation method the distance of the bands will keep on self adjusting themselves to the volatility conditions.

When the price becomes more volatile, the bands widen & they contract during less volatile periods.

The 3 Bands are designed & intended to encompass/enclose the majority of the currency price action. The middle band forms the basis for the trend, commonly 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 price volatility. The upper band is plotted at +2 standard deviations above middle band while the lower bollinger band is drawn at -2 standard deviations below the middle band.

FX Analysis and Generating Signals

• Bands provide a relative definition of high and low

• Used to identify periods of high and low market volatility

• Used to identify periods when the prices are at extreme levels

Consolidation - the Squeeze

The bands tighten as the price volatility reduces, this identifies the periods of consolidation. Sharp price break-outs tend to happen after the bands tighten.

Consolidation Chart Pattern

Continuation Signal - the Bulge

If the prices break through the upper or lower band & move outside the bands a continuation of the current trend is expected.

Reversal Signals - Double Top and Double Bottom Setup Patterns

Bottoms and tops made outside the bands followed by bottoms and tops made inside the bands call for reversals in the trend

The Head Fake - Forex Whipsaw

Traders should be on the lookout for false breakouts known as fake outs or head fakes.

Price oftenly breaks-out in one direction immediately following the Squeeze Pattern causing a lot of traders to think that the market break-out will continue in that particular given direction, only for it to quickly turn and reverse & make the true and more significant market break-out in the opposite market direction.

Traders who react quickly on the initial breakout commonly get caught up on the wrong side of the price action, while those traders expecting a "false breakout" can quickly close out their original position & enter a trade in the direction of the reversal. It is always good to combine Bollinger bands with other confirmation Trading Indicators.

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