MultiCharts: Trading Software for Automated Trading and Backtesting

Posted: **29 Jul 2008**

I was wondering if the Bollenger Band plot is based on an exponential moving average or a simple moving average. The mid line seems to plot on a simple moving average, by comparisson - but what about the actual bands - are they based on an ema or sma? Or is it that BB's are always based on an ema, by formula?

Thanks,
Simon

Posted: **29 Jul 2008**

According to John Bollinger in his book, Bollinger on Bollinger Bands. it is best to use SMA for BB.

Posted: **30 Jul 2008**

I use the Simple. It works fine.

Posted: **30 Jul 2008**

OK, thank you all. Still, it sure would be nice to be able to compare - even if just for the sake of comparison. Anyone have the skills to write out the code for an ema based BB - and willing to share..!

Simon

Posted: **30 Jul 2008**

OK, thank you all. Still, it sure would be nice to be able to compare - even if just for the sake of comparison. Anyone have the skills to write out the code for an ema based BB - and willing to share..!

Simon

Replace simple moving average with exponential in your code.

Here's BollingerBandxAvg function to get you started:

Inputs: Price(NumericSeries), Length(NumericSimple), StandardDev(NumericSimple);

BollingerBand.XAvg = Xaverage(Price, Length) + (StandardDev * StdDev(Price, Length));

Posted: **31 Jul 2008**

Here's the indicator you are looking for hope it helps.

Code: Select all


inputs:

	BollingerPrice( Close ),

	TestPriceUBand( Close ),

	TestPriceLBand( Close ),

	Length( 20 ),

	NumDevsUp( 2 ),

	NumDevsDn( -2 ),

	Displace( 0 ) ;



variables:

	var0( 0 ),

	var1( 0 ),

var2( 0 ),

	var3( 0 ) ;



var0 = XAverage( BollingerPrice, Length ) ;

var1 = StandardDev( BollingerPrice, Length, 1 ) ;

var3 = var0 + NumDevsUp * var1 ;

var2 = var0 + NumDevsDn * var1 ;



condition1 = Displace >= 0 or CurrentBar > AbsValue( Displace ) ;

if condition1 then 

	begin

	Plot1[Displace]( var3, "UpperBand" ) ;

	Plot2[Displace]( var2, "LowerBand" ) ;

	Plot3[Displace]( var0, "MidLine" ) ;



	                  

	if Displace <= 0 then

		begin

		condition1 = TestPriceLBand crosses over var2 ;

		if condition1 then

			Alert( "Price crossing over lower price band" ) 

		else 

		begin 

		condition1 = TestPriceUBand crosses under var3 ;

		if condition1 then

			Alert( "Price crossing under upper price band" ) ;

		end;

		end ;

	end ;

Posted: **31 Jul 2008**

Super, that is super!
Thanks,
Simon

MultiCharts: Trading Software for Automated Trading and Backtesting

Bollenger Bands with exponential moving average mid line

Bollenger Bands with exponential moving average mid line

He is correct.