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Charts

There are two formats for BB4X Charts: Classic Charts and Advanced Charts. You can use either with the click of a button. The advanced charts uniquely offer the TrendLines feature accessible by Professional subscribers only. In addition our advanced charts offer Automated TrendLines to detect uptrends and downtrends. Both charts include a wide list of more than 30 Technical Indicators, the most commonly used in Forex Technical Analysis. Only Professional subscribers can access all these indicators. Free registration will enable access to only the Bollinger Band indicators: %b and BandWidth.

All new indicators and features are now added to the advanced chart only. This is why we recommend the advanced chart to our users. It has a wider selection of indicators including the new Bollinger Band Indicators: BB Impulse, Percent Bandwidth and BandWidth Delta accessible by Professional subscribers. The advanced chart also supports a BBScript editor for programming indicators (Professional subscribers only). Using BBScript you can easily create nearly any indicator you can imagine and test your ideas with our new integrated Backtester. For more on that refer to the BBScript tutorial section and Backtester.

Finally another extremely popular advanced chart feature is the various Stop indicators available for Professional subscribers. These include highly customizable BBStops, Ice Breaker trading system, Chandelier and Parabolic Stops that plot indicator lines/signals and generate trade reports based on the signals generated. For more information, check the Stops & Systems tutorial section.



Charting Notes
Bar Colors
  • Bar (Traditional)
    All bars black.
  • Bar (Interday Color)
    Color of bars based on current tick's change.
    If current tick's last price is greater than previous tick's close, bar is green.
    If current tick's last price is less than previous tick's close, bar is red.
  • Bar (Intraday Color)
    Color of bars based on intraday action.
    If last is greater than open, bar is green.
    If last is less than open, bar is red.
Bollinger Bar Colors
Prices on the chart are represented with bars. Each bar consists of the open, high, low and close for the period.  The green portion indicates that the close was greater than the open, and the red portion indicates that the close was less than the open. Blue portions are the tick's range.




Advanced Charts
Our Advanced Charts are powered by Flash technology and are fully dynamic. All the Classic Chart features remain plus many more including zooming in and out, chart drag in time, re-ordering using drag and drop, history charts, etc…

The charts span longer data range which makes zooming in and out, moving the chart window in time possible. In other words, the initial snapshot is only a fraction of the total data loaded. You can change the range without having to refresh or request new data from the server. This also makes possible the use of a history window, which shows you where the current snapshot is with respect to the total data loaded. You can resize the current chart snapshot by dragging the left and right borders of the history window or even drag that window and the snapshot will be updated to reflect those changes.

The latest Adobe Flash Player is required for our Advanced Charts. Most browsers have this plugin already installed. If not, download for free from the Adobe website.


Chart options:
  • Forex Pairs: All possible forex pairs that can be plotted
  • Bar Lengths: 1, 5, 10, 30 minutes, 1 hour and daily
  • Chart Type: Bollinger Bars, line, candle sticks, traditional bars
  • Overlay 1: Choice of Bollinger Bands, Bollinger Envelopes--a BB4X exclusive for Professional users, or moving averages
    • Bollinger Bands ®
      Bollinger Bands are adaptive trading bands that answer the question "Are prices high or low?" on a relative basis. The adaptive mechanism is volatility. The middle band is a simple moving average with a default period of 20. The upper and lower bands are spread above and below the middle band by a multiple of standard deviation, with the default multiplier being two.

      MiddleBB = Average(close, 20)
      UpperBB = MiddleBB + 2.0 * StandardDeviation(close, 20)
      LowerBB = MiddleBB - 2.0 * StandardDeviation(close, 20)

      If you change the calculation period and wish to have the bands contain a consistent amount of data consider using the following multipliers: 10 periods, 1.9; 50 periods, 2.1.

      There are many uses for Bollinger Bands, amongst the most popular are pattern recognition and discrete buy and sell setups in combination with other indicators. See the book "Bollinger on Bollinger Bands" for a full explanation.
    • Bollinger Envelopes
      Bollinger Envelopes are a variation on Bollinger Bands that focus on the extremes of price action. While Bollinger Bands are centered on a moving average, usually of closing prices, Bollinger Envelopes are anchored by the highs and the lows. The upper Bollinger Envelope is constructed from a moving average of the highs and the standard deviation of the highs; the lower Bollinger Envelope is constructed from a moving average of the lows and the standard deviation of the lows. The formulas are:

      UpperBE = Average(high, 20) + 1.5 * StandardDeviation(high, 20)
      LowerBE = Average(low, 20) - 1.5 * StandardDeviation(low, 20)

      Since there is no middle band in the calculation, we imply one by taking the mean of the upper and lower envelopes.

      MiddleBE = (UpperBE + LowerBE) / 2

      Bollinger Envelopes are particularly useful where the trading session is not well defined, in periods of extreme market action and are used in the Ice Breaker trading system.
    • Simple Moving Average
      The simple moving average is perhaps the most elemental technical analysis tool. It is the sum of the data for a given number of data points divided by the number of the data points. In statistics it is known as the arithmetic mean. The word "moving" means that as each new data point becomes available the calculation window advances creating a new average.

      Simple Moving Average = sum(close, n) / n

      Often used to generate buy and sell signals when it is crossed, it is perhaps better used as a measure of trend direction when the period (n) is set to describe the intermediate-term trend. For the stock market using daily data, we find 20 periods to be a good starting default value for n.
    • Exponential Moving Average
      The simple moving average can be problematic due to its sensitivity to old data points leaving the calculation window. This is especially true for short-term averages. For example, when using a 10-period average if there was a large change in the data ten periods ago, the value of the average will change the next period even if price remains unchanged. A popular smoothing technique that avoids this problem is the exponential average. The calculation uses a portion of today's data and a portion of yesterday's average to arrive at today's average. This has the effect of increasing sensitivity to the most recent data and reducing sensitivity to older data.

      The weight to use is found via the formula exp = 2 / (n + 1), where n is the number of periods in a comparable simple moving average. For 10 periods 2 / (10 + 1) = 0.18.

      Exponential Moving Average = exp * close + (1 - exp) * prior average

  • Overlay 2: Choice of up to 3 simple or exponential moving averages.
  • John Bollinger's Price Magnet TM:
    Early market technicians often constructed artificial or synthetic prices as trading tools. There were three main approaches: synthetics designed to reflect where the security "should have been" trading, where it would trade in the future, or as indications of support and resistance.

    One example of synthetic prices that is still in use are the "floor trader's numbers":
    • Mid Point = (High + Low + Close) / 3 (the typical price)
    • Upper Pivot = 2 * Mid Point - Low
    • Lower Pivot = 2 * Mid Point - High

    See Marc Fisher on ACD and Pivots in his book "Logical Trader" for more on current usage. There are lots of other examples in the history of technical analysis.

    "In doing some work on zero-lag moving averages I was reminded of the calculations for synthetic prices. I saw similar ideas reflected in Jim Alphier's work, so I thought I'd give the idea a spin. I didn't want a simple bracket, Bollinger Bands already served well in that role. What I wanted was a sense of the most probable direction of prices. After a lot of staring at the ceiling, Price Magnets were born. The idea is simple and robust; the calculated prices act as 'magnets', 'pulling' prices higher or lower. You can think of them as a natural bias or tendency based on recent market action. The point plotted above or below today's bar is a forecast for tomorrow's direction. The threshold eliminates the Price Magnets plotted close to the current period's close. Set this to 0.0 to see all of the Price Magnets or to a larger value to see fewer Price Magnets; 2 or 4 are good choices for many stocks. Enjoy." JB


  • Zig Zag:
    The Zig Zag is a filtered price plot that eliminates short-term "noise". A Zig Zag plot connects swings of magnitudes greater than the user-selected percent threshold. If 10% is selected then the Zig Zag connects the highest highs and lowest lows that are separated by more than 10%. Zig Zag plots represent idealized price paths and are useful for clarifying price patterns and for trend identification. For example, if there is a high at 100, a 10% Zig Zag will ignore any price action until price falls to 90. If a a new high is made it will re-anchor to that high and wait for a 10% drop from the new anchor. After a 10% drop it will ignore anything short of a 10% rally or a new low. Our version is based on Arthur Merrill's work published in "Filtered Waves".


  • Chart size: Small, medium or large
  • Price Scale: Linear or logarithmic scale

The Advanced Charts include all the elements of the classic charts plus many additional features:
  • Ability to plot all price data with adjustable settings for the bar length, chart type, chart size and chart scale (linear or log-linear).
  • Ability to plot all indicators.
  • Easily show news, hips/lops and signals with dynamic on/off buttons.

    High Points and Low Points
    HIPs and LOPs are HIgh Points and LOw Points. HIPs and LOPs are often called pivots, but as we use that term already we'll stick with HIPs and LOPs.
    A HIP is a bar with a high that is higher than the bar before it or the bar after it. On the charts, a HIP is represented by a "H" above the day it occurred.
    A LOP is a bar with a low that is lower than the bar before it or the bar after it. On the charts, a LOP is represented by a "L" below the day it occurred.
    HIPs and LOPs are one of the oldest and most basic technical tools. Careful study of these crucial markers will reward you with a better understanding of the basic structure of price and market dynamics.

    Origin:
    The origin of the concept is most likely Henry Wheeler Chase's ringed highs and lows from the 1930s. In that era traders recorded prices on columnar pads for analysis and circled a high that was higher than the high above it or below it, or a low that was lower than the low above it or below it.

    What it does:
    In an upswing HIPs and LOPs will occur in an orderly progression higher and vice versa. In a consolidation they will form no discernible pattern.

    identifying short-term resistance and support and can be used as markers in a swing trading approach. They can also be used to identify stop levels and as trend identifiers in the wake of a Squeeze. They are also useful in pattern recognition. For example, most W bottom patterns will consist of a LOP, a HIP and then a LOP.

    The number in the drop-down list is known as the "order" of the HIPs and LOPs; it determines the number of days on each side of the HIP or LOP that are counted. For example, if you choose 2, only HIPs with two or more lower highs before and after will be marked. Please note that HIPs and LOPs are forward looking and need a number of periods equal to their order before they can be plotted.

  • The news scroll menu is dynamic and adjusts to the timeframe of the chart.
  • A history window below the chart shows all the currently loaded data and where you are in time span. When resized or dragged it changes the plotted range.
  • The main chart can be resized by rolling the mouse wheel over the chart inwards or outwards. The chart can be dragged by the mouse to the right for older data or to the left for newer data. All changes are reflected in the history window.
  • All data is streamed. Main chart and history chart constantly update, as does news and signal data.
  • The start and end date time of the range can be set by entering the data at the top of the chart.
  • Dynamic horizontal and vertical trackers highlight the underlying data. The vertical tracker always positions at the closest valid data point. The horizontal tracker reflects the exact mouse position. The color of the data is the same as the color of the indicator line.
  • All sub-charts can be dragged to re-arrange the order.

To plot an Advanced Chart, click the "Advanced Charts" button and a window pops up displaying the chart with the selected options. You may adjust the chart options and indicator selection directly from that window by clicking the "Chart Options" link at the top of the chart. You may also access chart help tips by clicking the "Chart Help" link on the top left corner of the page and selecting the desired tab. The chart data is streamed automatically. You may rearrange the position of the charts displayed by dragging and dropping the different charts into the positions you prefer.

Our advanced chart has become more and more cloud based. For subscribers, all chart and indicator settings are saved seamlessly on our server. Your chart customizations will be remembered on any computer you work on, independent of browser and independent of the machine used. All you need to do is log in to your BBForex.com account and the advanced chart will remember your previous customizations. This also includes all TrendLines previously drawn and your latest BBScript code saved. You don't have to save your script externally and you don't have to worry about losing it. We will store it for you along with your chart, indicator and TrendLines.

Our charts merge technical analysis with forex news from news publishers such as Associated Press, Reuters, IBD, Morningstar.com, TradingMarkets.com, CNNMoney.com and others. You can monitor forex charts and the latest news relating to specific symbol pairs as it occurs.

To use the news feature, go to the chart section and submit an advanced chart. In addition to the price and indicator charts, you will see a list of links to relevant news in chronological order. You can navigate manually by clicking the headlines in the list, or you can hover your mouse over the news flags on the chart. The news box will pop up to the highest layer. Once you click that news box, the list will scroll up or down to the appropriate news item and highlight it. Click the news item link and you'll be redirected to the article. You have the ability to toggle this news feature on and off at the top of the chart.

To switch back to classic charts, click the link "Switch to Classic Charts" on the top right corner of the pop up chart.



TrendLines (PROFESSIONAL subscribers only)
TrendLines are the latest addition to BBForex.com. This powerful feature brings interactive technical analysis tools to our Advanced Charts. TrendLines can be created and customized to suit your needs and preferences. The location, range and form of each TrendLine are determined interactively with your mouse on the chart.

To create TrendLines all you have to do is click the mouse pointer on the chart in "create mode". You can select between several popular varieties of TrendLines and place them in the desired locations on the chart, choosing the starting and ending coordinates with your mouse.

Usually TrendLines are anchored to significant points. Thus, the anchoring points can be snapped to significant points of interest such as a high, low, close, open, moving average, upper band, lower band, etc. on the price chart. When the mouse is positioned close to a significant point, the anchor point will snap to it.

You can switch to "edit mode" by clicking the Edit Mode button to re-size or re-anchor your TrendLines by dragging the anchor points. In Edit Mode you can drag the body of the TrendLine to relocate it on the chart or delete it. In addition, you can edit any parameters specific to a TrendLine by double clicking it.

When you switch back to "chart mode" by clicking the Chart Mode button the TrendLines will be remembered as you go back and forth in the history timeline.

In "edit and create mode", the news menu, price-chart dragging in time, as well as price-chart dragging for re-ordering are disabled. However, dragging the history window will still allow you to adjust the time window. In chart mode, the news can be re-enabled and the news boxes are placed on the top chart layer with the TrendLines on the layer beneath.

TrendLine Menu:
The TrendLine menu is located directly below the news menu and allows for creating different types of TrendLines, editing them and switching back to chart mode. There are six buttons to control TrendLine modes: The following six buttons switch the chart to trend line create mode:
  • Closed Start, Closed End: Using mouse drag and drop action, you can draw a TrendLine between two fixed anchor points.
  • Open Start, Closed End: Using mouse drag and drop action, you can draw a TrendLine originating from the right anchor point and extended towards negative infinity from the left anchor point.
  • Closed Start, Open End: Using mouse drag and drop action, the user can draw a trend line fixed at the left side anchor point but continues towards positive infinite at the right side anchor point.
  • Open Start, Open End: Using mouse drag and drop action, you can draw a TrendLine that is extrapolated to negative infinity from the left side anchor point and positive infinity from the right side anchor point.
  • Growth Line: Allows for the construction of the growth TrendLine. When selected, it pops up the growth line menu which allows for 2 input parameters: The open end check box and the annual rate value at which the line grows per year. If the former parameter is checked, the line will continue to grow in time beyond the right side anchor point. The annual rate is a number between +10 and -1. Enter 0.15 for 15% annual rate. The line is then drawn like the previous lines via drag and drop mouse actions.
  • Fibonacci Support/Resistance Multi-line: Allows for the construction of multiple support/resistance lines initially set at Fibonacci level ratios or ratios of you own choice. When selected, it pops up the multi-line menu which allows for several input parameters, the open end check box and up to nine ratio levels between -10 and +10. If the former parameter is checked, the lines will extend horizontally in time beyond the right side anchor point. This grid line is drawn via drag and drop mouse actions.
Users can delete TrendLines in create mode by pressing the Delete keyboard button, which will delete the last drawn TrendLine every time it is pressed. The remaining two buttons are the edit and chart mode:
  • Edit Mode Button: This button switches the chart to TrendLine edit mode. You can drag any anchor point on any TrendLine to resize it. You can also drag the whole TrendLine and reposition it on the chart by grabbing its body. In this mode TrendLines can be deleted by clicking on any desired object, which highlights it in red, and pressing the Delete keyboard button. Double clicking a multi-line grid or growth line will display its respective properties menu for editing its parameters. After submission, TrendLines will update accordingly to the newly updated parameters.
  • Chart Mode Button: This button returns to normal chart mode. All previously drawn TrendLines remain visible on the screen, the news mode is enabled and on-chart time drag is enabled.
Advanced Charts with TrendLines are available only for Professional users.


Auto TrendLines
BBForex charts offer customizable TrendLines that are created, edited and deleted manually by users with mouse interaction. There is also the option of automatically generating trend lines such as channels in up and down trends. If you select to show them, these trend lines are generated automatically without user interaction and cannot be edited. They use a specific algorithm to generate them. You always have the option to hide or show them on the chart using a settings switch similar to signals, BB fill or hip/lops switch.

Auto Trendlines



Classic Charts
The classic chart offers a wide variety of options and indicators for customization:

Chart options:
  • Forex Pairs: All possible forex pairs that can be plotted
  • Bar Lengths: 1, 5, 10, 30 minutes, 1 hour and daily
  • Chart Length: Time spans automatically change depending bar-length selection
  • Chart Type: Bollinger Bars, line, candle sticks, traditional bars
  • Overlay 1: Choice of Bollinger Bands, Bollinger Envelopes--a BB4X exclusive for Professional users, or moving averages
  • Overlay 2: Choice of up to 3 simple or exponential moving averages.
  • Chart size: Small, medium or large
  • Price Scale: Linear or logarithmic scale
  • Hips/Lops: Label Hips(high points) and Lops(low points)
  • Signals: Show/Hide signals exhibiting the criteria described by John Bollinger's methods-- for registered users

On the left side is the list of all the available indicators. We will be adding to these regularly. For detailed descriptions, click the indicator name in the "Indicator Help" box. Let us know if your favorite tool or technique is missing: BBands@BollingerBands.com

To save the chart or indicator settings, go to the "chart settings" section under Portfolio-- accessible to registered users.

A wide variety of indicators are available to registered users. To add an indicator to the chart, select the desired checkbox from the indicator list. For some indicators you may change the corresponding parameters.

To plot a Classic Chart, click the "Classic Charts" button and another window pops up displaying the chart with the selected options. You may adjust the chart options and indicator selection directly from that window by clicking the "Chart Options" link at the top of the chart. You may also access chart help tips by clicking the "Chart Help" link on the top left corner of the page and selecting the desired tab. The chart data is streamed automatically. You may rearrange the position of the charts displayed by dragging and dropping the different charts into the positions you prefer.

Our charts merge technical analysis with forex news from news publishers such as Associated Press, Reuters, IBD, Morningstar.com, TradingMarkets.com, CNNMoney.com and others. You can monitor forex charts and the latest news relating to specific symbol pairs as it occurs.

To view the news feature, go to the chart section and submit a chart. In addition to the price and indicator charts, you will see a list of links to relevant news in chronological order. You can navigate manually by clicking the headlines in the list, or you can hover your mouse over the news flags on the chart. The list will scroll up or down to the appropriate news item and highlight it. Click the news item link and you'll be redirected to the article. You have the ability to toggle this news feature on and off at the top of the news list menu.

To switch to Advanced Charts, click the link "Switch to Advanced Charts" on the top right corner of the pop up chart.



Forex Technical Indicators
We offer a wide variety of the most popular indicators used in Technical Analysis including Bollinger Bands analytics. Included down below are the names of indicators used along with a brief summary on each:

Bollinger Band ® Indicators
  • %b, Percent b: %b (Percent b) was one of the first two indicators derived from Bollinger Bands. It employs a variation on the formula for Stochastics. %b depicts the location of the most recent close within the Bollinger Bands. At 1.0, the close is at the upper band, at 0.0 the close is at the lower band and at 0.5 the close is at the middle band. A %b reading of 1.1 means that you are above the upper band by 10% of the width of the bands.

    -0.2 means that you are below the lower band by 20% of the width of the bands. To make analysis easier, we give you the opportunity to plot two smoothings of %b: %b1 and %b2. %b1 is a three period smoothing of %b and %b2 is a three period smoothing of %b1. These are similar to the smoothings used for Stochastics except that we use exponential averages.

    %b is a useful tool for identifying divergences, diagnosing tops and bottoms, and pattern recognition. %b is also used extensively in trading system construction. It is perfect for detecting when a new high or low is a new absolute extreme, but not a new extreme relative to the Bollinger Bands.
  • BandWidth: BandWidth was one of the first two indicators derived from Bollinger Bands. BandWidth depicts how wide the Bollinger Bands are as a function of the middle band. The formula is (upperBB - lowerBB) / middleBB.

    The most popular use of BandWidth is to identify The Squeeze, which is a 125-period low for the indicator, and is very helpful in diagnosing the beginning of trends. The opposite of The Squeeze, The Bulge, is useful in diagnosing the end of trends.

    In addition to the BandWidth line, we draw two reference lines to give a sense of where the current BandWidth stands in relation to history. The upper line represents the highest BandWidth in the past 125 periods (The Bulge when touched). The lower line represents the lowest BandWidth in the past 125 periods (The Squeeze when touched).

    Finally there is an option to plot a three period smoothing of BandWidth to help identify and clarify turning points.
  • BBImpulse (PROFESSIONAL subscribers only): BBImpulse is derived from %b. Its value is the periodic change of %b, so if %b was 0.45 this period and 0.20 last period the present value of BBImpulse is 0.25. We present two reference levels on the chart, an alert level and an impulse level. Generally the market moves in the direction of the latest alerts and/or impulses except towards the end of a move where one can take advantage of exhaustion/reversal signals from this indicator. Ian Woodward employs BBImpulse for his Kahuna signals using key levels of 0.24 and 0.40. (See the description for the indicator Stochastic Impulse.)
  • BandWidth Delta (PROFESSIONAL subscribers only): BandWidth Delta depicts the momentum of BandWidth and is useful in diagnosing the peaks and troughs in BandWidth as markers of potential trend changes. This indicator is especially useful when trying to analyze the potential for consolidations or reversals after large moves. You can think of BandWidth Delta as a magnifying glass for BandWidth.
  • Percent Bandwidth (PROFESSIONAL subscribers only): %BandWidth (Percent BandWidth) uses the formula for Stochastics to normalize BandWidth as a function of its n-day look-back period. 125-periods is the default, but you may choose your own look-back period. 1.0 equals the highest BandWidth in the past n periods, while 0.0 equals the lowest BandWidth in the past n periods. If you use 125 as the look-back period, then 0.0 = The Squeeze and 1.0 = The Bulge. The interpretations are similar to BandWidth, but some find the normalized, or closed presentation more intuitive. %BandWidth, along with %b, are two primary building blocks for Bollinger Band trading systems.
  • BBIndex (PROFESSIONAL subscribers only): BBIndex is a classic overbought/oversold indicator similar in application to the Commodity Channel Index (CCI). Indeed, it can be seen as a 'modern' version of CCI. Match the period to the trend that you are trading, 20 is the default, and use plus/minus 2.0 as the basic overbought/oversold reference levels with plus/minus 3.0 as extreme levels. BBIndex is also a superb divergence tool, and as such is helpful in identifying the beginnings and ends of trends.
  • BBMomentum (PROFESSIONAL subscribers only): BBMomentum measures price moves as a function of the width of the Bollinger Bands. BBMomentum's value is the n-period change in price divided by the upper band minus the lower band. A good starting value for n is half the length of the Bollinger Band calculation. So, if you are using 20-period Bollinger Bands, try 10 periods for BBMomentum.

    BBMomentum normalizes momentum using the width of the Bollinger Bands. In volatile times it takes a large change in price to create the same BBMomentum reading than a much smaller change would create in calm times. BBMomentum can be thought of as a form of volatility-normalized momentum and can be used the way any other momentum indicator is used.
  • BBTrend (PROFESSIONAL subscribers only): BBTrend takes advantage of the ways in which Bollinger Bands of different lengths interact to determine whether the market is trending or not. Amongst commonly used technical indicators, Average Directional Movement Index (ADX) and Choppiness Index serve similar purposes.

    You can select the two time periods, short and long. 20 and 50 are the defaults, but 10 and 30 or 40 may be more attractive for shorter-term traders.

    Unlike the traditional trend indicators, BBTrend combines directional information with the trend information. Readings below zero are indicative of negative trends and readings above zero indicate positive trends. The farther the reading away from zero the stronger the trend.
  • BBPersist (PROFESSIONAL subscribers only): BBPersist is simple, elegant counting application that counts highs above the upper Bollinger Band and lows below the lower Bollinger Band and nets them to create an indicator. BBPersist displays the balance between strength and weakness over time and is very helpful in diagnosing that difficult analytical problem, the walk up or down the bands.
Trending versus Trading Range
  • Directional Movement Index (PROFESSIONAL subscribers only): Created by Wells Wilder, these indicators parse the price structure into the positive and negative components, DMI+ and DMI-, which many use for buy and sell signals. However, the most interesting feature is a derivative of the DMI indices called Average Directional Movement Index, ADX. ADX indicates whether the data is trending or not. Values above 18 indicate trending markets while values below 18 are associated with trading-range markets. The direction of the line is also important, rising equals increasing trend strength and falling, decreasing. You may select the look-back period. 14- and 18-day calculation periods are quite common.
  • Vertical Horizontal Filter (PROFESSIONAL subscribers only): Tushar Chande's trend analysis tool compares the distance traveled within a range to the range itself. In a perfectly trending market the distance traveled and the range will be the same. The formula is range / distance. As it takes ever more travel to cover the range, the value of VHF falls. A 14-day period is the default.
  • Choppiness Index (PROFESSIONAL subscribers only): Choppiness Index, developed by E.W. Dreiss, uses chaos principles to measure "choppiness" or directionality of the market, whether prices are trending, or if we are in a consolidation period. The core idea is to compare the combined length of all the bars in a range (the ink) with the periodic range. Low values (below 38) indicate trending markets (up or down) and high values (above 62) indicate significant consolidations in price.
  • Aroon Indicator (PROFESSIONAL subscribers only): Aroon was developed by Tushar Chande and is designed to identify direction and magnitude of a trend. Aroon consists of 3 lines: Aroon Up, line above 70 indicates an up trend; Aroon Down, line above 70 indicates a down trend and Aroon Oscillator, line near zero indicates a consolidation phase (no trend). The idea is to count the number of days since the high of the range (this is the up line) and the low of the range (this is the down line), another simple concept that can produce surprisingly deep market insight.
  • The Range Indicator (PROFESSIONAL subscribers only): Published by Jack L. Weinberg in the June 1995 issue of Technical Analysis of Stocks & Commodities, The Range Indicator (TRI) compares high minus low (the range) with close versus close (the change). Look for trends to start from low levels of TRI when range and change are in gear and for trends to end from high levels of TRI when range and change are out of gear.
Overbought/Oversolds
  • Deviation from Average (PROFESSIONAL subscribers only): Deviation from Average is the most basic overbought/oversold tool. It expresses how far prices have deviated from the mean as measured by an n-period average. The actual value is the percent deviation from the average. A 50-period average is the default, though 10- and 20-period averages are commonly used as well.
  • Commodity Channel Index (PROFESSIONAL subscribers only): CCI is an overbought/oversold tool that uses volatility as its gauge and an old scaling convention derived from its commodity-futures-market heritage. 20 periods is the default. See BBIndex for a modern version of this indicator.
Trend Identification - Moving Average
  • Departure Chart (PROFESSIONAL subscribers only): The Departure Chart is one of the oldest technical studies. It measures the difference between two moving averages of price, one short and one long. Its primary use is as a trend identification tool, but it may be employed to identify overbought and oversold conditions as well. 10 and 20 are the default periods.
  • MACD (PROFESSIONAL subscribers only): Gerald Appel created MACD, a departure chart with an additional average added that acts as a signal line. The MACD line itself is the difference between a short-period and a long-period exponential average. The signal line is a n-period exponential average of the MACD line. The default periods for the short, long and exponential average are 12, 26, and 9, respectively. MACD Histogram is the difference between the MACD line and the signal and is used as an early alert system for changes in trend.
Momentum - Simple
  • Momentum (PROFESSIONAL subscribers only): Momentum is the point change of price over a specified time period and may be the most elemental indicator in the technician's tool chest. Futures traders are said to prefer MTM over Rate of Change, which depicts the percent change, as it models their profit and loss better. The second period is for an exponential moving average of MTM. 12 is the default period for MTM and 10 is the default period for the smoothing, though you may want to try three.
  • Rate of Change (PROFESSIONAL subscribers only): Rate of Change is the percent difference of price over a specified period. Stock traders are said to prefer ROC over Momentum as it is directly comparable from issue to issue and time to time. 12 is the default period for ROC.
Momentum - Up versus Down
  • Chande Momentum Oscillator (PROFESSIONAL subscribers only): CMO is Tushar Chande's attempt to capture "pure momentum". The idea is to separately sum up and down momentum over a given period and compare them with a normalized ratio. You may specify the look-back period; 14 is the default.
  • Relative Momentum Index (PROFESSIONAL subscribers only): This is Roger Altman's momentum variation on Welles Wilder's Relative Strength Index, RSI. Instead of accumulating +/- price changes, RMI accumulates +/-changes in momentum. Over 70 is considered overbought and under 30 is oversold. The first parameter is the days for calculating momentum, the default is 4. The second parameter is the time frame, the default is 14. (NOTE: RMI = RSI when time frame is the same and RMI momentum set to 1.)
  • Relative Strength Index (PROFESSIONAL subscribers only): Welles Wilder's Relative Strength Index, RSI, is a classic technical-analysis tool that compares strength on up days to weakness on down days. The fixed values of 70 (overbought) and 30 (oversold) are most often used as signal levels. However, in a bullish environment 80 and 40 may be better suited and 60 and 20 are often used in bear markets. Many analysts use the swings of RSI through various levels to define bull and bear markets.
  • Normalized RSI (PROFESSIONAL subscribers only): See RSI. Plotting 50-day, 2.1 standard deviation Bollinger Bands on RSI allows the analyst to dispense with fixed levels and focus on indicator action. The upper band serves the same role as RSI 70 (overbought) and the lower band serves the same role as RSI 30 (oversold). Here we go one step further and create a Normalized RSI by plotting %b of RSI using 50-day Bollinger Bands. The formula is:

    Normalized RSI = (RSI - LowerBB(RSI)) / (upperBB(RSI) - lowerBB(RSI))
    So now 0.0 serves as oversold and 1.0 serves as overbought.
  • Qstick (PROFESSIONAL subscribers only): Qstick is a moving average of the bodies of Japanese candlesticks, the relationship between the open and the close. Qstick is negative when the closes have been less than the opens on average and positive when the closes have been greater than the opens an average. Thus it is a look at the internal trend of the price structure. 5-10 day periods are most common. Qstick is distantly related to Accumulation- Distribution.
  • Ultimate Oscillator (PROFESSIONAL subscribers only): This is Larry Williams' weighted momentum oscillator. The Ultimate Oscillator is a combination of three different individual oscillators of varying time frames. This is usually the smoothest of our momentum tools. You may specify the time frames for the three underlying oscillators; 5, 10, and 20 are the defaults.
Relative Strength
  • Comparative Relative Strength (PROFESSIONAL subscribers only): Relative strength compares two price series over time by taking a ratio of one to the other. An RS line is most often used to compare the performance of a stock to the market or its industry group. A rising RS line indicates out-performance, while a falling RS line indicates under-performance. For example, IBM / SPY shows the performance of IBM versus the S&P 500 Index ETF.
Range Tools
  • Stochastics %K %D (PROFESSIONAL subscribers only): This is George Lane's Stochastics, an indicator of the position of current price relative to the price range of the past n-periods.
    Calculation:
    %k = (last price - lowest(low, n) / (highest(high, n) - lowest(low,n)) * 100
    %d = n-period sma of %k
    The first input sets the look-back period for lowest low and highest high, the second input sets the length of the average(s). The fast Stochastic presents %k and an average of %k. The slow Stochastic presentation drops the raw calculation and adds a second smoothing.
    Usage:
    Signal: %d line is generally used as the signal line.
    Overbought/Oversold: Above 80 means the current price is near the top of its n-day high-low range and below 20 means it's near the bottom of the range. Values above 80 are considered overbought and values below 20 as oversold. Prices may persist at these levels, so pattern recognition is employed to identify trading opportunities.
    Divergence:
    Bullish Reversal - price is trending down, Stochastic is bottoming and turning up.
    Bearish Reversal - price is trending up, Stochastic is peaking and turning down.
  • Stochastic Impulse (PROFESSIONAL subscribers only): Stochastic Impulse is a BBands.com exclusive indicator. It is a variation on BBImpulse that depicts the changes in Stochastics rather than the changes in %b. Another way of saying this is that BBImpulse measures impulse strength in relation to the Bollinger Bands and Stochastic Impulse measures impulse strength in relation to range. (See BBImpulse.)
  • Williams %R (PROFESSIONAL subscribers only): This is a variation on Stochastics that some prefer. %R depicts where you are in the range of the past n-days without smoothing. Note that the scale is inverted from that for Stochastics. A 10- or 20-day period is a good starting place for stocks.
  • Average True Range (PROFESSIONAL subscribers only): The True Range of an issue for a given period is the high minus the low plus any gap in price that formed between sessions. It is the range as it might have been had trading continued for 24 hours. Average True Range is an n-period average of True Range. This is a basic volatility tool that is often used in trading systems, position sizing and the setting of stops such as Chandelier stops.
Alphier Indicators
The late Jim Alphier passed away unexpectedly in 1990. He was a portfolio manager, market historian and a master technician that took most of his knowledge with him to the grave. Fortunately all was not lost and I was able to learn three of Jim's indicators from Fred Wynia: Expectations, Psychology and Conviction. We feel that these three are amongst his most important contributions and we are confident that these versions are reasonably true to his conceptions. (See Sponsored Volume in the volume indicators section for a rare Alphier contribution to volume analysis.)
  • Alphier Psychology (PROFESSIONAL subscribers only): This is a short-term component of the Expectations curve that is more sensitive than Expectations. It is shorter-term in outlook and can be used on its own or to help anticipate changes in the Expectations curve.
  • Alphier Expectation (PROFESSIONAL subscribers only): The Expectations curve is a supply-demand calculation along the lines of Accumulation-Distribution or Intraday Intensity. It is executed with Jim's unique flair and there isn't really anything else in technical analysis quite like it. Use it as you would any other supply-demand tool - volume is not a factor - or follow the rules we have implemented on the chart.
    Expectation Chart rules:
    1. 40 and 160 delimit the oversold and overbought zones.
    2. Alerts & Signals
    • Red Minus signs (-) are Sell Alerts
      Green Minus signs (-) are Buy Alerts
      Alerts are precursors to Signals. They can act as signals for aggressive investors.
    • Red Plus signs (+) are Regular Sell Signals
      Green Plus signs (+) are Regular Buy Signals
    • Red asterics (*) are Major Shift Sell Signals
      Green asterics (*) are Major Shift Buy Signals
    • Red hashtags (#) are Reversal Sell Signals
      Green hashtags (#) are Reversal Buy Signals
    • Following a Major Shift Signal, the first opposite Regular Signal is ignored.
    • Red dots (.) are 200 Sell Rules (2nd consecutive Expectation above 200)
      Green dots (.) are 0 Buy Rules (2nd consecutive Expectation less than 0)
  • Alphier Conviction (PROFESSIONAL subscribers only): This is a classic divergence indicator, implemented as only Jim might have; it works by providing a comparison of the counts of plus and minus days versus the actual gains recorded. Classic divergence analysis is at its best here.
Chandelier Stops
  • Chandelier Stops: (PROFESSIONAL subscribers only)
    For Chandelier Stops indicators, refer to the Stops & Systems section.
Parabolic Stops
  • Parabolic Stops: (PROFESSIONAL subscribers only)
    For Parabolic Stops indicators, refer to the Stops & Systems section.
BBStops
  • BBStops: (PROFESSIONAL subscribers only)
    For BBStops indicators, refer to the Stops & Systems section.
Ice Breaker Signals
  • Ice Breaker Signals: (PROFESSIONAL subscribers only)
    For Ice Breaker Signals, refer to the Stops & Systems section.

BBScript (PROFESSIONAL subscribers only)
For BBScript information, refer to our BBScript tutorial.


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