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The creator of the Bollinger Bands, John Bollinger, states that periods of low volatility are often followed by periods of high volatility. When volatility increases, Bollinger Bands widen. John Bollinger further states that an "explosion" in volatility offers an opportunity for traders.
This trading signal detects when a volatility explosion based on the Bollinger Bands occurs. In order to measure and visualise the explosion, NanoTarder displays the volatility in percent in a chart below the main chart. This indicator is called the Bollinger Bands Volatility Oscillator.
A buy signal appears if:
A short sell signal appears if: