Berma Bands (BB) is a technical analysis tool that helps filter between ranging and trending price movements. The indicator consists of three-line studies: Upper Berma Band – Middle Berma Band – Lower Berma Band. By analyzing the relationship between the price and the BBs, traders can discern whether a market is in a trending or ranging phase.
Berma Bands Formula.
The formula behind this indicator can be explained in the next steps:
1. Calculate the “Berma Deviation Percent (BD%)” as described in this blog:
https://www.mql5.com/en/blogs/post/759788
2. Multiply the Simple moving average by BD%. Will call it “Change”
3. The “Upper Berma Band” is the sum of the simple moving average plus the change.
4. The “Middle Berma Band” equals to its simple moving average.
5. The “Lower Berma Band” equals the simple moving average minus the change.
How to use Berma Bands.
Use the Berma Bands as a filter to help you to identify the trend direction.
If BB lines separate from each other then there is a great probability that price candles will move in a side-way or a ranging movement.
When BB lines separate from each other and price candles move in between them then you can trade with a ranging market strategy.
If BB lines combine like a single line, then there is a great probability that the price will move in a trending movement.
When BB lines combine like a single line and price candles move away from them then trade with a trending market strategy.
Buy signals appear the first time the price candles cross above the upper BB, and sell signals appear the first time the price candles cross below the lower BB.
Berma Bands’ Mt5 Indicator Inputs.
BB Candles [Min =2]: The number of candles used in band calculations. If less than two the indicator will print a message, and this parameter will be reset to default (= 160).
Show Arrows & Vertical Lines: This parameter will allow you to see potential buy and sell signals on the chart. You can choose to show one or both. The default is to “Show Arrows Only”. If you choose to “Hide All” then all kinds of alert on new signals will be disabled, because the signals are hidden from the chart.
Alert on New Signal: Choose to use or stop alert sound and message Default is true.
Send Email on New Signal: Option to send messages to the user by email. Default is false.
Send Notification on New Signal: Option to send mobile notifications to the user. Default is false.
Chart Color Scheme: Here you can find ready-made color schemes that will make your chart look more professional. The default choice is “Do Nothing”. If you choose the default choice, then you can use the next parameters to set your colors.
Custom Cloud Color: The default is Midnight Blue.
Custom Buy Color: The default is Blue.
Custom Sell Color: The default is Red.
Set Chart on Foreground: The default is false.
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