The Custom Bollinger Bands indicator is based on the invention of the Bollinger Bands by John Bollinger in the 1980s. The basic concept of the indicator is to calculate the standard deviation of price over a user defined period of time (example: 20) and then multiply that number by a user defined multiple (example: 2)—we can call the calculated value the “offset.” To find the upper band, a user would add the offset to a moving average of the users choice (example SMA(20)) and the opposite would be done to find the lower band. When price exceeds the upper or lower levels, price can be defined as too high / low. The benefit of using the Custom Bollinger Bands indicator is that our version works with all of our moving averages and it gives the user an option to plot 3 different levels of standard deviation instead of just 1. If a user doesn’t like the concept of standard deviations, we also offer the option to use a static tick offset. For example, if the user wanted to see an offset from anyone of our moving averages of 20, 40, or 60 ticks, the user would have the option to change the offset type from standard deviation to static ticks.
The NinjaTrader indicator Custom Bollinger Bands is built on our Moving Average Framework, which allows users to easily run the indicator on multiple time frames (MTF), including custom bar types. Please preview the indicator in the following video: