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// BOLLINGER_BANDS.MQ5
What are Bollinger Bands?
Bollinger BandsVolatility
Draws two bands that flex with the standard deviation to show how far price has strayed from its average.
A price band made of a middle SMA and upper/lower bands set a multiple of standard deviations apart.
UpperMiddleLowerIllustrative data — not real market data, not a trading signalUpperMiddleLowerIllustrative data — not real market data, not a trading signal
Illustrative signals of the rule on simulated data — not a trading recommendation.
Rule: The wick touches the outer BB(20,2) band and price closes back inside: lower band buy, upper band sell. Entry = close of the signal candle; SL = entry ∓ 1.5 × ATR(14); TP1/TP2/TP3 = 1R/2R/3R.
CONCEPT ILLUSTRATION · Signal rule: The wick touches the outer BB(20,2) band and price closes back inside: lower band buy, upper band sell.Touches the lower band → wait to BUY · BB 20, 2σUpper band20-period averageLower band
Three reasons Bollinger Bands is still used after decades.
Self-adapting
The bands widen when the market is active and narrow when it is quiet, with no manual adjustment.
Measures the market state
The band width shows whether the market is consolidating or running.
Warns of breakouts
An unusually tight squeeze often comes before a strong move.
// READING_SIGNALS
How to read Bollinger Bands signals
How Bollinger Bands produces its number, and what each shape on the chart means.
Formula and how it works
The middle line is the SMA over N periods; the upper/lower bands are the middle line plus/minus K times the standard deviation of price over the same window. The bands narrow when the market is quiet and widen when volatility rises. Price usually moves within this range.
How to use it in an EA
Reversal strategy: look to buy at the lower band and sell at the upper band when the market moves sideways. A squeeze signals that a strong breakout may be coming.
Fits when
The market moves sideways, with price oscillating around a value zone and often returning to the middle of the bands.
Struggles when
A strong one-way trend. Price rides the band for many sessions, and every trade back toward the middle loses.
Price touches the upper bandPrice has strayed far from its average. In a strong trend, price can ride the band for a long time.
CONCEPT ILLUSTRATION · Price touches the upper bandTouches the upper band → wait to SELL · BB 20, 2σUpper band20-period averageLower band
The bands squeezeVolatility is compressing. It often comes before a breakout — but does not show the direction.
CONCEPT ILLUSTRATION · The bands squeezeBands narrow → watch for the breakout · 20 · 2Upper / lower bandMiddle SMA
Price closes outside the bandsAn unusual move relative to the last 20 candles, not automatically a reversal.
CONCEPT ILLUSTRATION · Price closes outside the bandsClose outside the bands → unusual volatility · 20 · 2Upper band20-period averageLower band
Price returns to the middle lineThe middle line is itself a moving average — it is the balance point.
CONCEPT ILLUSTRATION · Price returns to the middle linePrice returns to the middle SMA → balance zone · 20 · 2Upper band20-period averageLower band
Common mistakes
Treating a band touch as a reversal signal. The band only says price is far from its average, not that it is about to come back.
// PARAMETERS
Recommended MT5 parameters for Bollinger Bands
Default values of the sample file; test them for your market and timeframe.
Parameter
Description
InpPeriod
Period of the SMA and standard deviation (default 20).
InpDev
Standard deviation multiple for the bands (default 2.0).
// INSTALL
Put the indicator into MetaTrader 5
Four steps, no software needed besides MT5.
01Download the .mq5 file
Click the download button above; the file saves to your computer under the indicator's name.
02Open the data folder
In MetaTrader 5 choose File → Open Data Folder, then go to MQL5/Indicators.
03Compile
Open the file in MetaEditor and click Compile. No errors means the indicator is ready.
04Drag it onto the chart
Go back to MT5, refresh the Navigator and drag the indicator onto the price chart.
📄 bollinger_bands.mq5
DinexSpace wrote this file from the indicator's public formula, not from any commercial source. You are free to edit and reuse it.
// THE_DIFFERENCE
How it differs from MetaTrader 5's built-in indicator
The short answer: the formula is not different. What differs is what you can do with it.
Bollinger Bands here gives exactly the same number as MetaTrader 5's built-in version — on purpose. The four points below are what differs, and all four can be read from the very bollinger_bands.mq5 you download.
Calls a built-in indicator
No — the calculation sits in OnCalculate and can be copied straight into an EA
External libraries
Not a single #import declaration
Code length
57 lines · 2 input parameters
How it draws
Drawn over the price chart · calculated incrementally, does not redraw the past
Tells a real squeeze apart. Narrow bands can come from a truly compressed market or just from the parameters; ATR measures the real range and shows which it is.
Note
This pair answers 'is volatility coming', but still not 'in which direction'.
Volatility is compressing and a strong move often follows. But a squeeze does NOT tell you whether price will go up or down — to know the direction you need a trend indicator alongside it.
Should I sell when price touches the upper band?+
Not automatically. In a strong uptrend, price can ride the upper band for many sessions and every sell loses. Trading the bands only makes sense once you have confirmed the market is moving sideways.
Does Bollinger Bands on this page use real or simulated data?+
The chart on this page uses a deterministic simulated candle series; it is not market prices or trading results.
Using Bollinger Bands in an EA, and further reading
An indicator draws signals, but when to enter, where to stop out and how much to risk are still your set of rules. Send those rules and DinexSpace builds them into an EA.
