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: 2022.07.27
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Add Bollinger Bands to chart
Add Bollinger Bands to chart
On MetaTrader4 (MT4) / MetaTrader5 (MT5), you can display the Bollinger Bands. The Bollinger Band is a technical indicator developed by John Bollinger (USA). It consists of a set of trendlines plotted based on the standard deviations above and below a moving average of the price. The Bollinger Band lets you see the volatility at a glance. It gives you an idea of how much the price is dispersed from the average.
Switch between MT4/MT5 tabs to check the steps for each.
Step 1
The Bollinger Bands can be set up from the menu or Navigator.
The middle line is a simple moving average
The middle line of the Bollinger Bands is a simple moving average (SMA). Changing it to an exponential moving average (EMA) or other MAs, or hiding it is not allowed in MT4/MT5.
Add Bollinger Bands from the menu
Click "Insert" in the menu. Hover the pointer over "Indicators" > "Trend" and select "Bollinger Bands".
Add Bollinger Bands from the Navigator
On the Navigator, click on the "+" signs next to "Indicators" and "Trend". Select "Bollinger Bands" and drag it onto the chart you wish to apply it to.
Or, right-click on "Bollinger Bands" and select "Attach to a chart".
Step 2
The setting window for Bollinger Bands will appear. Set the parameters in the "Parameters", "Levels", and "Visualization" tabs and click "OK".
"Parameters" tab
|
Number |
Item name |
Descriptions |
|---|---|---|
|
1 |
Period |
Set the period for the moving average. The unit here is the number of candlesticks. If you select the daily chart and set it to "20", the Bollinger Bands for the past 20 days will be generated. |
|
2 |
Shift |
You can shift the placement of the Bollinger Bands to the left or right. The unit is the number of candles. Type a positive value to move it to the right, and a negative value to move it to the left. |
|
3 |
Deviations |
Set the standard deviation. If you set it to "2", Bollinger Bands will be formed with ±2σ deviation. |
|
4 |
Apply to |
Price to use for calculating Bollinger Bands. Close: close price Open: open price High: high price Low: low price Median Price (HL/2): (high price + low price) ÷2 Typical Price (HLC/3): (high price + low price + close price) ÷3 Weighted Close (HLCC/4): (high price + low price + close price×2) ÷4 |
|
5 |
Style |
Set the color, line type, and line thickness for Bollinger bands. |
"Levels" tab
To add a band, go to the "Levels" tab and click "Add" to enter your preferred multiplier for the standard deviation of the main Bollinger Bands. For example, if "Deviations" is set at "2" and the level is also "2", a new band will be formed with "4σ".
"1" is recommended for the deviation of the main bands
When the "Deviations" parameter in the "Parameter" tab is set to "1", and "2" and "-2" are added in the "Levels" tab, you will see two sets of bands, ±1σ and ±2σ. The "Levels" tab specifies the value that the standard deviation of the main Bollinger Bands is to be multiplied by. Therefore, setting the "Deviation" parameter at "1" can make it simple to tell what a standard deviation of an additional band will be, which is, the same as the value of the multiplier.
"Visualization" tab
On the "Visualization" tab, you can show/hide Bollinger Bands in the Data Window and specify the timeframes to use Bollinger Bands with.
Bollinger Band comes from the theory of standard deviation and normal distribution
The Bollinger Bands come from the theory of standard deviation and normal distribution. Standard deviation shows how much the data (price in this case) is spread out relative to the average. The theory of normal distribution defines the probability of a data group falling within a certain range. See the figure on the right for more details.
The Bollinger Band tool lets you draw these theoretical lines on the chart. The lines indicate a ±1σ, ±2σ, ±3σ from the inside to the outside. However, please note that the currency pairs don't always follow the rules of normal distribution.
Step 3
Bollinger Bands will be displayed on the chart. The upper line of the Bollinger Bands is called the upper band, the middle one is the middle line, and the lower one is the lower band.
To display multiple Bollinger Bands
You can add a standard deviation from the "Levels" tab, or follow the same steps above and adjust the view settings of the Bollinger Bands to display multiple Bollinger Bands on the chart. Go to the "Parameters" tab and adjust the moving average and standard deviation settings to display multiple Bollinger Bands on the same chart.
Step 1
The Bollinger Bands can be set up from the menu or Navigator.
The middle line is a simple moving average
The middle line of the Bollinger Bands is a simple moving average (SMA). Changing it to an exponential moving average (EMA) or other MAs, or hiding it is not allowed in MT4/MT5.
Add Bollinger Bands from the menu
Click "Insert" in the menu. Hover the pointer over "Indicators" > "Trend" and select "Bollinger Bands".
Add Bollinger Bands from the Navigator
On the Navigator, go to "Indicators" and click on the "+" sign next to "Trend". Select "Bollinger Bands" and drag it onto the chart you wish to apply it to.
Or, right-click on "Bollinger Bands" and select "Attach to Chart".
Step 2
The setting window for Bollinger Bands will appear. Set the parameters in the "Parameters", "Levels", and "Visualization" tab and click "OK".
"Parameters" tab
|
Number |
Item name |
Descriptions |
|---|---|---|
|
1 |
Period |
Set the period for the moving average. The unit here is the number of candlesticks. If you select the daily chart and set it to "20", the Bollinger Bands for the past 20 days will be generated. |
|
2 |
Shift |
You can shift the placement of the Bollinger Bands to the left or right. The unit is the number of candles. Type a positive value to move it to the right, and a negative value to move it to the left. |
|
3 |
Deviations |
Set the standard deviation. If you set it to "2", Bollinger Bands will be formed with ±2σ deviation. |
|
4 |
Apply to |
Price to use for calculating Bollinger Bands.
Close: close price |
|
5 |
Style |
Set the color, line type, and line thickness for Bollinger bands. |
"Levels" tab
To add a band, set "Deviations" to 1 in the "Parameters" tab first. Then go to the "Levels" tab and click "Add" to enter your preferred standard deviation. If you add "2" and "-2", you can display bands with two standard deviations, "±1σ" and "±2σ" on the chart.
"1" is recommended for the deviation of the main bands
When the "Deviations" parameter in the "Parameter" tab is set to "1", and "2" and "-2" are added in the "Levels" tab, you will see two sets of bands, ±1σ and ±2σ. The "Levels" tab specifies the value that the standard deviation of the main Bollinger Bands is to be multiplied by. Therefore, setting the "Deviation" parameter at "1" can make it simple to tell what a standard deviation of an additional band will be, which is, the same as the value of the multiplier.
"Visualization" tab
On the "Visualization" tab, you can show/hide Bollinger Bands in the Data Window and specify the timeframes to use Bollinger Bands with.
Bollinger Band comes from the theory of standard deviation and normal distribution
The Bollinger Band comes from the theory of standard deviation and normal distribution. Standard deviation shows how much the data (price in this case) is spread out relative to the average. The theory of normal distribution defines the probability of a data group falling within a certain range. See the figure below for more details.
The Bollinger Band tool lets you draw these theoretical lines on the chart. The lines indicate a ±1σ, ±2σ, ±3σ from the inside to the outside. However, please note that the currency pairs don't always follow the rules of normal distribution.
Step 3
Bollinger Bands will be displayed on the chart.The upper line of the Bollinger Bands is called the upper band, the middle one is the middle line, and the lower one is the lower band.
To display multiple Bollinger Bands
You can add a standard deviation from the "Levels" tab, or follow the same steps above and adjust the view settings of the Bollinger Band to display multiple Bollinger Bands on the chart. Go to the "Parameters" tab and adjust the moving average and standard deviation settings to display multiple Bollinger Bands on the same chart.
Last updated
: 2024.01.05
Nakamaru is a manual production consultant at FINTECS, a company that specializes in creating manuals for their clients.
With a wide range of experience from fintech to entertainment, he presents what user-friendly manuals should be like.
He works with numerous large corporations as an external manual production project manager.
【Business information】
http://www.fintecs.co.jp/profile/
Supervisor
Akira Takagi
Systems engineer, MetaTrader administrator
After graduating from Computer Science at the Uninove, Brazil, in 2014, he has worked on various systems development projects.
He participated as a developer in the launch of forex services in 2019. Since then, he has also been involved in the development of MetaTrader plugins and APIs. He is certified by MetaQuotes as a MetaTrader5 Administrator and active in consulting and advisory as well.
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