# Bollinger Bandwidth Indicator for MT4/MT5

Bollinger band width (BBW) indicator in MT4 was created by John Bollinger, who introduced it in his book “Bollinger on Bollinger Bands”. In fact, the Bollinger band width mt5 indicator measures the percentage difference between the upper and lower Bollinger bands in crypto, currency, and forex markets. And it is one of the two parameters derived from the Bollinger band (the other is %B).

## What is Bollinger Band Width indicator ?

Bollinger band width Indicator shows the evolution of price volatility. Therefore it works as follows: when the volatility increases, the distance between the upper band and lower band will expand and the band width value rises. Conversely, when the volatility decreases, the distance between these two bands will contract then the band width.

In addition, when the two bands (the upper and the lower) are far apart, this is an indication that the current direction is nearing an end, but when the distance between them is narrow that is an indication that there is an initiation of a movement in either direction.

The BBW indicator contains a middle band with two outer bands. However, these bands in mt5 use the same parameters as the Bollinger band which are:

• Simple moving-average period: for the middle band, usually set at 20 periods.
• Standard deviation: for the outer bands, usually set 2 standard deviations above or below the SMA.

## Indicator Formula

The computation of the bandwidth indicator is as follow:

Band Width = [ (Upper Bollinger Band – Lower Bollinger Band) / Middle Bollinger Band ]

## How to trade with this indicator?

Bollinger band width indicator is an oscillator that depends on the volatility. However, the volatility doesn’t give any trading signals because it is not a trend.

So, CFD traders in Tradingview notice the change in volatility once they use the Bollinger bandwidth indicator. This volatility can tell you the level of your reward according to the risk taken. High volatility means that you took a high risk so you have a high reward. And vice versa.

## Bollinger band Vs Bollinger bandwidth

The Bollinger band refers to bands placed on a chart to present the volatility in the stock market and it consists of three lines drawn in relation to price. But Bollinger bandwidth consists in fact of a single line drawn below the chart price of the bollinger bands in simple words, it calculates the difference between the upper and lower bollinger bands and divides them by the middle band.

Therefore BBW calculates the volatility in the stock market as we said earlier, according to the Bollinger bands.

Moreover, when you have a high BBW indicator, it will be presented in the price chart by an increase in the distance of the outer bands. But if you have a low BBW indicator it marks by a decrease in the distance between the upper and lower bollinger bands.

Bollinger bandwidth indicator for MT4 is a technical indicator in Metatrader displayed below the main chart price. However, the graph below taken from the MetaTrader 4 platform shows a peak in the chart which means that the crypto market is very volatile and the BBW indicator rises, and vice versa.

This MT5 Bollinger band width indicator is a technical indicator in Metatrader 5 that shows the volatility of the cryptocurrency in the coins market with the help of two bands. However, the picture below presents the difference between the two bands when the volatility is high and when it is low in MetaTrader 5. And you can also remark the change in the movement of the blue line which represents the change in BBW value.

In fact, the chart below shows the three different bands of the Bollinger band width indicator in Tradingview. And we marked the distance between these bands to illustrate the volatility in the stock market.

### Conclusion

Bollinger band width indicator is popular which can be used in MT4. However, it helps traders to gauge the volatility in the crypto/forex market and to better understand their investments in MT5 also. Moreover, it is easy to use but it requires the use of other indicators to be useful. In conclusion, it is also known by identifying the squeeze in Tradingview also.