BandPercentile [Orderflowing]

17 nov. 2023

BandPercentile | Bollinger Band Analysis | Bandpass Filtering | Customizable (+)
Built using Pine Script V5.

Introduction
The BandPercentile indicator is a technical analysis tool that improves the traditional Bollinger Bands as a Percentile concept.

Inspiration and Evolution
The BandPercentile was born of the simplicity of calculating the Bollinger Bands Percentile.
It evolves this concept by addressing a need for greater customization and precision.
The integration of the Experimental version of the Bandpass Filter & Super Smoothing, a concept by John Ehlers, adds a layer of sophistication - allowing for a different view.

Core Functionality
The BandPercentile calculates percentile values based on the position of the price within the Bollinger Bands, offering a way to see overbought and oversold market conditions.
The indicator is designed to provide clear visual cues for market extremes, aiding in decision-making for entries and exits.
These market extremes or overbought/sold levels are fully customizable.

Unique Features and Customization

• Overbought/Oversold Dots: Visual markers for identifying critical market thresholds.
  
• Divergence Detection: Highlights potential bullish and bearish divergences, aiding in predictive analysis.
  
• Multiple Moving Average Types: Choose from SMA, Hull, Dema, EMA, WMA, and LINREG for calculations.
  
• Customizable Parameters: Adjust length, multiplier, and overbought/oversold levels to fit various trading styles.
  
• Roofing Filter Integration: Incorporates Ehlers' Bandpass Filter for signal processing.
  

Example of 2 pole bandpass filtering on daily calculation / 4 hour chart:

Example of 3 pole bandpass filtering on daily calculation / 4 hour chart:


Analysis and Interpretation
The indicator provides a scale, ranging from extreme overbought to extreme oversold levels, with customizable levels for divergence/confirmed trend shift analysis.
This scale is useful for traders to understand market sentiment and potential reversal points.

Interpretation and Visuals
The BandPercentile indicator is designed with a clear, color-coded system for better readability and quick interpretation:

• Primary Overbought and Oversold Lines: These are marked in red and blue, respectively, to signify the most critical overbought and oversold levels.
  
• Extended Overbought and Oversold Lines: Additional red and blue lines represent extended overbought and oversold levels, showing more extreme market conditions.
  
• Middle Line: This line acts as a central balance point, providing a reference for the current market state relative to overbought and oversold conditions.
  
• Intermediate Middle Levels: These are additional lines marked in lighter shades of blue and red, indicating lower mid and higher mid levels that can signal emerging trends or potential reversals.
  
• Markers: Distinct shapes are used to highlight potential trend reversals, helping with identifying opportunities.
  

Multi-Timeframe
The indicator's flexibility allows for application across most asset classes and timeframes, making it suitable for different trading strategies, from day trading to long-term investing.
Example using the Daily BandPercentile on a 4H chart:


Trading Style
Whether you are a momentum trader, swing trader, or a long-term investor.
The BandPercentile can be made to suit diverse trading styles and risk parameters.

Usage and Applications

• Market Extremes Identification - Pinpoint overbought and oversold conditions.
  
• Divergence Analysis - Detect potential trend reversals before they occur.
  
• Customizable Analysis - Edit the indicator inputs to align with personal trading strategies and preferences.
  

The Value
BandPercentile stands out as an innovative tool.
It also respects the individuality of each trader's approach.
Its advanced filtering and customization capabilities makes it valuable.

Conclusion
The BandPercentile indicator is a useful tool for traders to optimize their strategy.
Its unique blend of traditional concepts and modern filtering techniques makes it one-of-a-kind.

Do not solely rely on the signals from the BandPercentile.
The indicator is meant to be used as confluence to your existing strategy.

2 juil.

Notes de version

V1.1 - Added inputs to show/hide arrows, early reversals & divergences.
Added color customization for arrows and divergence dots.
Fixed divergence logic to detect and display regular and hidden divergences with labels.
Updated tooltips and input settings for improved user experience.

7 sept.

Notes de version

V1.1.1 - Trend Flip Logic Rework, Changed Default Inputs & Settings.

18 sept.

Notes de version

V1.2 - Adjusted Line Logic