3-Way Bollinger Trend [ZynAlgo]1. Overview
3-Way Bollinger Trend combines 3 layers of analysis into a single price band, rather than relying on a plain moving average: a fast center line , a volatility band (classic Bollinger-style, auto widening/narrowing with recent volatility), and momentum-based coloring (Bullish / Bearish / Sideway). On top of this it generates signals with a "pullback to the center line" logic - not a reversal-at-the-band-edge approach - to catch pullback continuations within a trend rather than only tops and bottoms.
2. The Three Components
Center line - reacts quickly to price with clearly less lag than a same-length standard moving average, while staying smooth enough to avoid noise. Band Settings -> HMA Length (default 20).
Volatility band - width reflects recent volatility; one single band tier (no inner/outer). Band Settings -> Band Width (x StDev) (default 2.0).
Momentum-based coloring - the center line and band both change color with the momentum state: Green = BULLISH (strong upward momentum), Red = BEARISH (strong downward momentum), Yellow = SIDEWAY (direction unclear). RSI Settings -> Bullish above / Bearish below. These thresholds do not just change color - they decide which trade direction is allowed (see section 3).
3. Reading the Signal
Pullback logic - the signal is built in two stages. Trigger: price closes back on the trend side of the center line. Confirmation: price holds on that side for a set number of extra bars (Signal Settings -> Confirmation Bars) without crossing back. Only when both complete does the signal fire; a cross-back during confirmation cancels it and a fresh Trigger is required.
Why confirmation - crossing the center line is a frequent event, so firing instantly would expose it to whipsaws. Confirmation is the only filter used; no candle-shape pattern (pin bar, engulfing) is required.
Effective Trend (most misunderstood) - the indicator remembers the most recent official trend whenever momentum reads clearly Bullish or Bearish. In the Sideway zone it does NOT clear that memory - it keeps using the last recorded trend to decide direction. Bullish -> only Buy allowed; Bearish -> only Sell allowed; Sideway -> follows the last effective trend. Sideway does not mean both directions are open.
Entry & Stop - Entry is the open of the bar immediately after the final confirmation bar (never the signal bar). Stop is an ATR distance from entry, computed at the confirmation bar, not from candle wicks. Signal Settings -> SL Distance (x ATR).
4. Take Profit & R-Multiple Management
Three R-based targets (R = the SL distance): TP1 = 1.0R (always on), TP2 = 2.0R (Enable TP2), TP3 = 3.0R (Enable TP3).
Automatic trailing stop: TP1 hit -> SL to breakeven; TP2 hit -> SL up to TP1.
Time-based exit: a trade open too long (default 200 bars) without hitting SL or the final TP closes as a TIMEOUT - neither win nor loss.
Adjustable under Risk & Reward (TP1/TP2/TP3, Enable TP2/TP3, Max Trade Duration).
5. Trade Mode - the Master Switch
OFF (default) - center line and colored band stay visible; signal arrows still fire with a hover explanation; Stability Mode and Smart Signal Filter are bypassed; no SL/TP boxes or Win Rate/PF tracking. Best for observing before live trading.
ON - center line and band hidden; full SL/TP boxes with a real-time trailing SL line; Stability Mode and Smart Signal Filter take effect; dashboard adds Trades / Win Rate / Profit Factor. Best for simulating real trading performance.
6. Execution Filters (active only when Trade Mode is ON)
Stability Mode (default On) - blocks new signals while a trade is already open.
Smart Signal Filter (default Off) - forces Buy/Sell to alternate.
Cooldown (Bars) (default 5) - minimum spacing between two consecutive signals.
7. Dashboard
RSI - current momentum reading.
Momentum Zone - BULLISH / BEARISH / SIDEWAY (color-coded).
Trades (Trade Mode ON) - total trades recorded.
Win Rate / PF (Trade Mode ON) - win rate and Profit Factor. A breakeven exit counts as 0.5 of a win; Profit Factor is unaffected since a breakeven trade adds 0 to both profit and loss.
Dashboard position and text size are adjustable under Display / Dashboard.
8. Alerts
Reversal Buy - fires when a Buy signal is officially confirmed.
Reversal Sell - fires when a Sell signal is officially confirmed.
9. Notes
The Trades / Win Rate / Profit Factor figures come from an internal, non-executed simulation over the visible history on the chart. They are a study of the settings on past data - not a backtest, not a broker report, and not indicative of future results.
No candle-shape requirement - the signal is defined only by the Trigger + Confirmation pairing described above.
All signal logic processes fully closed bars only, never a still-forming bar, so signals do not repaint.
Sideway does not mean fully neutral - always check the last effective trend (section 3) before wondering why a yellow band only shows Sell or Buy.
This indicator is a tool for study and education, not financial advice, and does not guarantee any trading outcome. Always apply your own analysis and risk management.
10. Practical Tips
New to it? Keep Trade Mode off for a while, watch when the arrows appear, and read the hover explanations first.
Market whipsawing around the center line? Raise Confirmation Bars to 3-4 to filter more false signals.
Want fewer, higher-conviction signals? Increase Cooldown (Bars) and consider enabling Smart Signal Filter.
SL too wide or tight for the instrument? Adjust SL Distance (x ATR) - it drives the whole R-multiple TP structure.
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