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Add Bollinger Bands to chart

The Bollinger Band is a technical indicator developed by John Bollinger (USA). It is defined by a set of trendlines plotted two standard deviations (positively and negatively) away from 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. Here we will look at how to add Bollinger Band to a chart on MetaTrader5 (MT5). The Bollinger Band can be set up from the menu or Navigator.

The middle line of the Bollinger Bands is a simple moving average (SMA). Changing it to an exponential moving average (EMA) or hiding it is not allowed in MT5.

Step 1

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 menu Add Bollinger Bands from the menu

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.

Add Bollinger Bands from the Navigator Add Bollinger Bands from the Navigator

Or, right-click on "Bollinger Bands" and select "Attach to Chart".

Step 1 Step 1

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

"Parameters" tab "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
Previous indicator's data: the price data applied to the previous indicator
First indicator's data: the price data applied to the first indicator

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.

"Levels" tab "Levels" tab

"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.

"Visualization" tab "Visualization" tab
knowledge 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.

Bollinger Bands

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.

Bollinger Bands Bollinger Bands

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.

Step 3 Step 3
point 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.


Date

Created

 : 2022.07.27

Update

Last updated

 : 2022.07.27

Writer

Takayoshi Nakamaru

Manual production consultant, MBA

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Takayoshi Nakamaru

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

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Akira Takagi

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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