Range Bands Indicator V2.0

Range Bands Indicator v2.0

Introduction

Range Bands provide a universal trend-following indicator which can be applied to any stock, commodity, index or ETF in any time frame. Range Bands provide a clear and unambiguous indication of trend direction.

The advantage of using Range Bands is that if prices make a big move, you are likely to be on the right side of the trade. Range Bands may also prevent you from being shaken out on short term fluctuations while a big move develops. The disadvantage of using Range Bands is that the distance between the bands is over 2 times the Average True Range so in broad, ranging markets, positions may be whipsawed leading to losses.

When an uptrend develops, PaintBars will change from green to blue. When a downtrend develops, PaintBars will change from green to red. For extra certainty, you may consider waiting for 2 consecutive blue or red bars to confirm the change in trend.

Range bands for TradeStationare delivered in several forms as follows:

Functions

RangeBandsLower(Length) - Returns lower range band value price

RangeBandsUpper(Length) - Returns upper range band value price

Indicator

RangeBandsLowerLine(Length) - Draws Range Bands lower line

RangeBandsUpperLine(Length) - Draws Range Bands upper line

Note that for the indicator to appear with price, select Format, Scaling and next to Scale On, select Same AsUnderLying Data.

PaintBar

RangeBandsUpperPaintBar(Length) - Paints the bar blue when price is above the upper line

RangeBandsLowerPaintBar(Length) - Paints the bar blue red when price is below the lower line.

ShowMe

RangeBandsStopDots(Length) – When an uptrend is place, paints blue dots below the price action at the point at which the uptrend will become a downtrend. When a downtrend is in place, paints red dot above the price action at the point at which the downtrend will become an uptrend.

Strategy

RangeBandsLE - Range Bands long entry strategy

RangeBandsLX - Range Bands long exit strategy

RangeBandsSE - Range Bands short entry strategy

RangeBandsSX - Range Bands short exit strategy

All of these strategy components take action at the next bar and at the market.

Contact Information

Christopher Smith

Version History

4/2/2016 – Original

11/30/2016 – Updates as follows:

Both RangeBandsUpperPaintBar() and RangeBandsLowerPaintBar() have been enhanced to always paint non-trending bars green. This will ensure the indicator appears as intended. Also PaintBars are now updated based on the most recent price tick received, so you no longer need to wait for completion of the bar before it paints. Note that you must select “Update Value Intra-Bar” on the General Tab of the indicator format for this feature to work.

RangeBandsStopDots –When an uptrend is in force (bar painted blue), the price level at which the trend will change to down is plotted below the bar as a red dot. When a downtrend is in force (bar painted red) the price level at which the trend will change to up is plotted above the bar as a blue dot. When no trend is in force (bars are green) no dot is plotted.

The benefit of the stop dots is that when you are in a trend trade, you can trail your stop at the level provided by the stop dots. When you are not in a trade, the stop dots can help you to control risk by understanding how far prices will have to move for the current trend to be reversed.

Legal Agreement

By using the RangeBands indicator, you agree to the following terms and conditions:

1) Use of the RangeBands is for you unlimited personal use. You may not sell, transfer, give away or otherwise make the results of the study available to others without consent of the owner.

2) Use of the RangeBands indicator does constitute trading or investment advice and you are responsible for the outcome of all of your trades.

3) You agree to hold Christopher K Smith from any damages due to the performance of the RangeBands indicator and derived products.

4) Every reasonable attempt has been made to ensure that the information presented by the indicator is accurate and reliable, however no warranty is expressed or implied that the indicator will accurately indicate levels of support and resistance in the future.

5) Use of the RangeBands indicator implies agreement with the remaining terms and conditions.

Disclaimers

U.S. Government Required Disclaimer – Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with money you can’t afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures, stocks or options on the same. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.

CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL, OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE DISCUSSED WITHIN THIS SITE, SUPPORT AND TEXTS. OUR COURSE(S), PRODUCTS AND SERVICES SHOULD BE USED AS LEARNING AIDS ONLY AND SHOULD NOT BE USED TO INVEST REAL MONEY. IF YOU DECIDE TO INVEST REAL MONEY, ALL

Every reasonable attempt has been made to make sure any information we present is accurate and reliable. However, use of this site constitutes an agreement that you take full responsibility for your own actions and will not hold TCX Systems LLC, its officers, employees, partners, and/or affiliates responsible for any consequences of using any information provided by this site though web pages, email, or any other means of communication.

Nothing on this site is, or should be construed as, investment advice. The information posted here is only the opinion of the author and should not be taken as recommendations to buy or sell any security or financial instrument. Trading and investing inherently involves the risk of significant loss of money, and can involve the risk of loss of more than the amount invested. Before executing any trade readers are strongly cautioned to consult with a financial adviser of their choosing.

TradeStation Group, Inc. and Christopher K Smith separate, unaffiliated entities and are not responsible for each other’s services and products.

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