Using Nested Bollinger Channels to Display Trend Strength

Summary

This document describes a visual indicator that uses two Bollinger channels with different widths to communicate how far price has moved from its usual range. Bars receive one color treatment when price crosses the inner channel and a brighter treatment when it moves beyond the wider channel. Price inside the inner channel is left without colored bars. The visual distinction is intended to make stronger excursions stand out from milder ones.

The source description identifies the indicator as a trend-strength tool and notes that it originated as an MQL4 implementation, first published in 2006. It gives no channel settings, formula details, trading rules, or performance evidence. As a result, it explains the display concept but does not show that channel crossings predict continuation, identify reversals, or improve returns. Traders would need to define parameters and test any use of the coloring in the market and timeframe of interest.

Key ideas

• The indicator compares price with two Bollinger channels of different widths.
• Crossing the inner channel and crossing the wider channel produce distinct bar-color treatments.
• Bars remain uncolored while price stays inside the inner channel.
• The description offers no parameter values or evidence that the visual signal is profitable.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.