📈BBWP

Bollinger Band Width Percentile

• Look for extreme reads, either into the red zone (extremely expanded, high volatility, >90%) or blue zone (extremely contracted, low volatility, <10%). If red → expect contraction to follow, If blue → expect expansion to follow.

• REMEMBER THAT VOLATILITY IS DIRECTION NEUTRAL

• If the BBWP prints extreme high volatility reads ( or red vertical bars >98%) expect some local bottom/high in or at least some sideways/consolidation as contraction is more probable. If these red prints come after an upside move → local top closer or sideways first before continuation of the trend. If these red prints come after a downside move → local bottom closer or sideways first before continuation of the trend.

• On the other hand If the BBWP prints extreme low volatility reads (or blue vertical bars <2%) expect some move soon as the consolidation is probably really mature at this point. Looking for a trending move to follow.

• The lower de BBWP goes the healthier the consolidation is.

• One easy way to trade with this indicator is by marking the highs and lows of the formed range and wait for the expansion + breakout/down of the range to trade the continuation of the trend.

Tip: You can use the slope of the moving average [(MA) the white line] to confirm whether it is an expansion or contraction phase. When BBWP is below the MA + negative slope on the MA → contraction phase. When BBWP is above the MA + positive slope on the MA → expansion phase.

Really good indicator when you use it in confluence with EMAs, stochastics/momentum oscillators (RSI for example) and ranges. Good in any time frame.

Link to indicator on TradingView: https://www.tradingview.com/script/tqitSsyG-Bollinger-Band-Width-Percentile/

BBWP practical example on BTC HTF