BBand Stop Alert Indicator

The BBand Stop Alert generates trend indications in MT4 platforms, assisting forex & stock day/intraday traders in making buy-sell decisions. It employs an automated trend line that closely analyzes price swing positions and market momentum changes. Furthermore, the indicator employs an 8-period Bollinger Band to determine intraday price breakout levels.

What is the BBand Stop Alert Indicator?

The BBands Stop Alert Indicator is an easy trend-following indicator. It not only defines market trends, but it also indicates potential trend reversal points, which are regarded as trade signals. The BBands stop can be used to trade any forex currency pair. The BBands Stop Alert Indicator works with all timeframe charts available in your forex MT4 trading platform, thus it can be used for both scalping and day trading. This indicator can also be readily customized for e-mail alerts, ensuring that you never miss a trade indication.

Setting up the BBand Stop Alert Indicator
Setting up the BBand Stop Alert Indicator

BBand Stop Alert Strategy

The BBands Stop Alert Indicator employs an 8-day price monitoring system that collects the highs and lows of the price over the given time period in order to plot trend signs. It also has a Standard Deviation Period 1 and NBars applied to the previous 1000 bars for backtesting. According to the general principle, when the price falls below the BBands Stop level and continues to close below the indication level, it indicates that the market is in a bearish trend. Price moving over the BBands Stop level and remaining above the indication level, on the other hand, is seen as a bullish trend signal. To aid comprehension, the indicator incorporates arrow indications indicating the potential direction of the forthcoming trend.

Buy Signal

The following could be your checklist for a buy trade:

  • When price rises above the BBands Stop level.
  • When an upward-pointing arrow indicator is drawn beneath the current price candle.

Once these events occur:

  • You could open a buy position after you confirm your entry with bullish candlestick patterns.
  • You could set your stop loss just below the nearest swing low.
  • You could set your take profit at the nearest resistance zone, or you could exit trade anytime an arrow pointing downward appears above the price candle.
  • For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
BBand Stop Alert Indicator Buy Setup
BBand Stop Alert Indicator Buy Setup

Sell Signal

The following could be your checklist for a sell trade:

  • When price falls below the BBands Stop level.
  • When a downward-pointing arrow indicator is drawn above the current price candle.

Once these events occur:

  • You could open a sell position after you confirm your entry with bearish candlestick patterns.
  • You could set your stop loss just above the nearest swing high.
  • You could set your take profit at the nearest support zone, or you could exit trade anytime an arrow pointing upward appears beneath the price candle.
  • For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
BBand Stop Alert Indicator Sell Setup
BBand Stop Alert Indicator Sell Setup

BBand Stop Alert Pros & Cons

Pros

  • The BBand Stop Alert Indicator may inform the traders on the momentum of the market so they could organize their trades accordingly.
  • This indicator can also help traders take advantage of trending markets, possibly enabling them to ride trends without exiting too quickly.

Cons

  • The BBand Stop Alert Indicator may not meet the trader’s expectations in a ranging market.
  • This indicator may sometimes mistake a trend correction for a trend reversal, and vice versa.

Conclusion

The BBand Stop Alert indicator provides novice traders with a simple but consistent trading approach. The MT4 indicator could be used on different timeframes, though better on those where there is less noise and a consistent signal frequency. You could ensure to enable the sound alarm so you can be notified if there is a probable change in market trends. You may want to keep your expectations realistic as well because this indicator may generate false signals sometimes.

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