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Indicator for identifying ranging condition

  • Post #1
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  • First Post: Edited Sep 15, 2024 6:08am Jul 6, 2021 9:10am | Edited Sep 15, 2024 6:08am
I saw an indicator on Tradingview the other day. I want to keep my MT4, because it is better in so many ways, so I had to programme the indicator for MT4.

The biggest problem we have as traders are - when is the chart ranging and when is it trending. There are many ways to find the information, but I don't have the perfect way. I have allways thought, that the Bollinger Indicator is one of the best indicators for the purpose, but it can be quit messy and it can be difficult to sort out the view in a glance. So I made this indicator which I think is smart. Don't know if it exists for MT4 allready - probably does, I just haven't come across it.

It is very simple. The indicator looks x bars back using the Bollinger formula. It meassure the distance between upper and lower band. This distance is defined by John Bollinger as a meassure of trending conditions. If the distance is big, then the chart is trending. If it is small, then the chart is in a range.

So my indicator sums the distance between the two bands at x bars behind and the divide the result by the number of bars. This gives you a simple average of the condition.

I only finished the coding right now and hasn't really played around with the indicator. But as allways when you use an indicator, it is important to play with the settings. There are only one setting for now. That is the number of bars the indicator shall operate. MA_Length. I find that if you set the value to twice the bars in the Bollinger indicator, then you have less noise. I will show the indicator in the next thread. Have a little patience please.

Keep in mind, that this indicator is lacking. It cannot tell you for certain anything about the future. But I am a fan of the saying "whatever the chart is doing - it want to continue doing just that".

Go to post #30 for the latest version. No, there is no MT5 and no you cannot have the code for version 6, because it contain a lot of other code which work with my robots.


Update September 2024: This tool have now become one of my main tools in my setups.
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  • Post #2
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  • Edited 1:41pm Jul 6, 2021 9:14am | Edited 1:41pm
So here is the chart. When the yellow line goes over the red histogram, then the condition is ranging and when it goes under the green histogram the condition is beginning to trend. I think that the indicator can be a helping hand when deciding entry point, but it is not the best at deciding the exit point.

At the chart I have the Bollinger indicator with a setting of 20,2. And my momentum indicator has a setting of 40.
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Attached File(s)
File Type: ex4 BollingerMomentum_3.ex4   8 KB | 1,525 downloads
Attached File(s)
File Type: mq4 BollingerMomentum_3.mq4   5 KB | 2,115 downloads
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Quoting RiskFighter
So here is the chart. When the yellow line goes below the histogram, then the condition is ranging and when it goes over the histogram the condition is beginning to trend. I think that the indicator can be a helping hand when deciding entry point, but it is not the best at deciding the exit point. At the chart I have the Bollinger indicator with a setting of 20,2. And my momentum indicator has a setting of 40. {image}
Do you mean it ranges when yellow line goes above the histogram?
Very fine piece of work, RiskFighter!
Quoting feast
{quote} Do you mean it ranges when yellow line goes above the histogram?
When yellow line is over the red histogram, then it ranges.
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Quoting Drolph
Very fine piece of work, RiskFighter!
Thank you Drolph. I have missed this tool allways.
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Thank you Admin for moving the thread to a correct position!
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Look at this!!! I still haven't played with it. This is just the pair that I have open while programming the indicator. 68 pips in 1.5 hours.

Thank you John Bollinger. You are tremendous.
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  • Post #10
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  • Edited 11:44am Jul 6, 2021 11:17am | Edited 11:44am
I hereby challenge you all.

  1. How can this indicator be used for entry. What should be the additional signs of entry?
  2. Which is the best way to exit the trade. Giving the highest average profit?
  3. Is it better for higher timeframes with less faulties?

Please note, that the indicator does not give any hint of the direction of the market - nothing. Only if it is ranging or trending.

Also note, that if the market is trending, and the direction is shifting from say Short into Long, then the histogram can be green both before and after the change if the trend in the new direction is still strong. This can be hard to understand, but it really is positive that you get the signal, that when trend is changing, then it is a strong trend.

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Very interesting!

But please tell me may be I'm wrong

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First entry because histogram was > yellow line & close > upper BB
Second because > too & close < lower BB

Or I miss smth?

p.s. the idea to count distance is extremely good. I'm using about the same approach but not with BB, but the main idea is the same.
Observer effect
Quoting ryuryu
Very interesting! But please tell me may be I'm wrong {image} First entry because histogram was > yellow line & close > upper BB Second because > too & close < lower BB Or I miss smth? p.s. the idea to count distance is extremely good. I'm using about the same approach but not with BB, but the main idea is the same.
Yes you are wrong.

1: The first signal you point out, is not a signal from my indicator. Look at the green bars. My indicator sets the signal way before.
2: My indicator does not take into conciderence if the signal is over or below any line. It is the distance between upper band and lower band that is the input to the indicator. A large distance gives a trend. A small distance gives a range. Easy.

It is not my invention. John Bollinger made the theory. But I think that my indicator gives a better glance for reaction than the normal Bollinger Band.
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Quoting RiskFighter
{file}{file}
Thank you for this great work. Please how do we add them to the charts?
I tried my usual way - to my indicator list but they are not showing!
Quoting RiskFighter
{quote} Yes you are wrong. 1: The first signal you point out, is not a signal from my indicator. Look at the green bars. My indicator sets the signal way before. 2: My indicator does not take into conciderence if the signal is over or below any line. It is the distance between upper band and lower band that is the input to the indicator. A large distance gives a trend. A small distance gives a range. Easy. It is not my invention. John Bollinger made the theory. But I think that my indicator gives a better glance for reaction than the normal Bollinger...
You asked

  1. How can this indicator be used for entry. What should be the additional signs of entry?

Didn't get your answer, but no problem. Anyway your research is very promising! Stay green!

Observer effect
Thanks for this. It's a great one. Many uses to use for this indi. I've immediately found it improved my system by acting as a volume/volatility filter. I'm going to test further but it could also be used as a possible confirmation indicator as well. Anyway, good indicator and thanks for sharing
You gotta boop the snoot
Learning to scalp NAS100 Part 2 All Time Return: 0.5%
Quoting Glorybound
{quote} Thank you for this great work. Please how do we add them to the charts? I tried my usual way - to my indicator list but they are not showing!
Well, I add it as usual to the directory of indicators. No problem at my end. Did you remember to refresh?? Right click on the heading "Indicators" and click on refresh.

Anybody else having a problem??
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Quoting Matteorossi
{quote} RF, you said "... and when it goes over the histogram the condition is beginning to trend". I think the right sentence is " when it goes over the GREEN histogram the condition is beginning to trend."
No. When the yellow line goes over the red histogram, it ranges.
When the line goes under the green histogram it is trending.
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Dear @RiskFighter , thanks for the great suggestion and your indicator that we can all use the idea. I have a question about this. When the histogram turns green, is there a difference if the yellow line touches the green bars or not? By that I mean is there any difference if the yellow line is above or below the green bar.
Thank you very much.
Regards
Quoting dr.butze
Dear @RiskFighter , thanks for the great suggestion and your indicator that we can all use the idea. I have a question about this. When the histogram turns green, is there a difference if the yellow line touches the green bars or not? By that I mean is there any difference if the yellow line is above or below the green bar. Thank you very much. Regards
Well, you can look at it in two ways. The other way is using the histogram. Forget the line. If the histogram is red, then it is ranging. If the histogram is green, then it is trending.

The indicator does NOT know which direction it is trending. You have to find the direction using something else.
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Quoting RiskFighter
{quote} Well, you can look at it in two ways. The other way is using the histogram. Forget the line. If the histogram is red, then it is ranging. If the histogram is green, then it is trending. The indicator does NOT know which direction it is trending. You have to find the direction using something else.
Thank you very much.
I was aware that the direction is unknown and it is only about the distance. However, the function of the 40 MA was unclear to me
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