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i Bands Price is a momentum oscillator. Its construction is different from usual momentum oscillators like RSI and stochastics. This is based on the price deviations away from a moving average of price. The I Bands oscillator oscillates between 0 and 100. Values above middle line 0.50 implies up trend and in a down trend the indicator remains below the middle line. Values above 0.75 is considered overbought and values below 0.25 is considered over sold.
When the indicator shows oversold markets, wait for other indicators to confirm a price reversal and open buy position. The indicator crossing the middle line, 0.50 level, can be used as a buy signal and crossing below the middle line can be used as a sell signal. But these signals must be confirmed by other indicators. The indicator generates the best signals when there is divergence between the indicator and price. When price makes new highs, but the indicator fails to rise to new highs, is clear indication the trend is ending. When price makes new lows but the indicator begins to rise from lower levels, it is clear indication that down trend is ending.
The indicator has few parameters. Bands Period determines the period for indicator calculation, default value is 20. Bands shift decides the forward displacement of indicator values, 0 means no shifting. Bands deviations the standard deviation to be used in measuring price deviations from the moving average. Slow is the smoothing period. The parameter values are changed in the VTL editor.
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When the indicator shows oversold markets, wait for other indicators to confirm a price reversal and open buy position. The indicator crossing the middle line, 0.50 level, can be used as a buy signal and crossing below the middle line can be used as a sell signal. But these signals must be confirmed by other indicators. The indicator generates the best signals when there is divergence between the indicator and price. When price makes new highs, but the indicator fails to rise to new highs, is clear indication the trend is ending. When price makes new lows but the indicator begins to rise from lower levels, it is clear indication that down trend is ending.
The indicator has few parameters. Bands Period determines the period for indicator calculation, default value is 20. Bands shift decides the forward displacement of indicator values, 0 means no shifting. Bands deviations the standard deviation to be used in measuring price deviations from the moving average. Slow is the smoothing period. The parameter values are changed in the VTL editor.
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