Detect price crashes in volatile conditions. This is an indicator for a greedy dollar cost average (DCA) strategy. That is, for people who want to repeatedly buy an asset over time when its price is crashing.
- Price crashes are indicated if the price falls below one or more of the 4 lower Bollinger Bands which are calculated with increasing multipliers for the standard deviation.
- In these conditions, the price is far below the average. Therefore they are considered good buying opportunities.
- No buy signals are emitted if the Bollinger Bands are tight, i.e. if the bandwidth (upper -lower band) is below the value of the moving average multiplied with a threshold factor. This ensures that signals are only emitted if the conditions are highly volatile.
- The Bollinger Bands are calculated based on the daily candles, irrespective the chart time frame. This allows to check the strategy on lower time frames
- Condition if bands are wide no longer depends of the number of standard deviations used to calculate the main Bollinger Bands.
- Adjusted some default values for the number of standard deviations.
- Skipped signals are now plotted in red.
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.