Derived from the original Bollinger bands.
The Bollinger Fibonacci ratios is a volatility based MT4 Stock Indexes Indicators but it does not use the standard deviation to calculate the width of the bands instead it uses a smoothed ATR that are multiplied with Fibonacci ratios of 1.618, 2.618, and 4.236.
The smoothed lines that are multiplied with Fibonacci ratios are then added or subtracted from the moving average.
This forms 3 upper Fibonacci bands and 3 lower Fibonacci bands
The middle band forms the basis of the trend.
MT4 Indices Technical Indicator and Generating Indices Trading Signals
This MT4 Indices Indicator used to determine point of support and resistance for indices.
The lines below represent support points while those above are resistance levels.
The outermost bands provide the strongest resistance/support.
The inner most bands provide least support/resistance.
The innermost band represents Fibonacci 38.2 % retracement level
The second band represents Fibonacci 50 % retracement level
The outermost band represents Fibonacci 61.8 % retracement level
The MT4 Indices Indicator is used to determine points where stock indexes price might reverse. (Indices Price Pullback Levels)
When stock indexes price hits one of the lines and reverses then an entry or exit signal is generated.
However, it is always good to combine the signal with other confirmation MT4 Stock Indexes Indicators such as the moving average to confirm the signal as shown below.
MT4 Stock Indexes Indicator