Double Bollinger with Outer Movement Range

This double BB indicator shows an inner and outer band. The extra outer band picks up on extreme price movement, to allow for more aggressive entries or exits.

As a candle's value changes, it changes the value of the Bollinger band. This causes the BB to "retreat" from the candle as it approaches the band. It also means that if a candle retraces toward the centre basis line, the Bollinger bands will close in. This can lead to "passive crosses", where price never actually penetrated the Bollinger band, but instead the returning Bollinger band crossed the price.

Looking at the historic chart, these passive crosses make it look like price crossing the outer BB is a reliable indicator for entries and exits. Unfortunately, the intracandle movement may lead to disappointment.

The outer movement range of this indicator shows how far the outer BB moved in response to each candle's price movement. If the candle did not penetrate the outside of the movement range, it did not actively penetrate the Bollinger band. Instead, the band crossed the price as the candle retraced.

Useful for fine-tuning entry and exit signals, especially when looking for real-time bar signals. It's better to trigger an entry or exit by the candle's high or low being higher or lower than the Bollinger Band, to capture as much as possible of the likely mean reversion.