Volume Bollinger Bands with Breakout/Capitulation

A custom indicator created by James on TrendSpider. You can import this custom indicator into your TrendSpider account. Don't have TrendSpider? Create an account first, then import the custom indicator.

Source code

This indicator had been implemented by James in JavaScript on TrendSpider. Check out the developer documentation to learn more about JS on TrendSpider.

describe_indicator('Volume Bollinger Bands with Breakout/Capitulation', 'lower', { decimals: 0, shortName: 'Vol BB+' });

// Input parameters for the Bollinger Bands calculation
const length = input.number('Length', 20, { min: 1, max: 100 });
const multiplier = input.number('Multiplier', 2, { min: 0.1, max: 5 });
const breakoutMultiplier = input.number('Breakout Multiplier', 2, { min: 1, max: 5 });
const lookbackPeriod = input.number('Lookback Period', 5, { min: 1, max: 20 });

// Calculate the moving average of volume
const maVolume = sma(volume, length);

// Calculate the standard deviation of volume
const stdevVolume = stdev(volume, length);

// Calculate the upper and lower Bollinger Bands
const upperBand = add(maVolume, mult(stdevVolume, multiplier));
const lowerBand = sub(maVolume, mult(stdevVolume, multiplier));

// Calculate the breakout threshold
const breakoutThreshold = add(maVolume, mult(stdevVolume, breakoutMultiplier));

// Determine the highest and lowest close of the previous period
const highestClose = shift(highest(close, lookbackPeriod), 1);
const lowestClose = shift(lowest(close, lookbackPeriod), 1);

// Detect breakouts and capitulations
const isBreakout = for_every(volume, close, highestClose, (v, c, h) => v > breakoutThreshold[volume.indexOf(v)] && c > h);
const isCapitulation = for_every(volume, close, lowestClose, (v, c, l) => v > breakoutThreshold[volume.indexOf(v)] && c < l);

// Color the volume bars
const volumeColor = for_every(volume, maVolume, isBreakout, isCapitulation, (v, ma, b, c) => {
    if (b) return 'green';
    if (c) return 'red';
    return v > ma ? 'grey' : '#999';
});

// Paint the moving average of volume
paint(maVolume, { name: 'MA Volume', color: 'blue', thickness: 2 });

// Paint the upper Bollinger Band
paint(upperBand, { name: 'Upper Band', color: 'red', thickness: 2 });

// Paint the lower Bollinger Band
paint(lowerBand, { name: 'Lower Band', color: 'green', thickness: 2 });

// Paint the actual volume
paint(volume, { name: 'Volume', style: 'histogram', color: volumeColor });

// Fill the area between the bands
fill(
    paint(upperBand, { hidden: true }),
    paint(lowerBand, { hidden: true }),
    '#cccccc',
    0.1
);

// Add breakout and capitulation labels and register signals
for_every(isBreakout, isCapitulation, (b, c, _, i) => {
    if (b) {
        paint_label_at_line(paint(close), i, 'B', { color: 'green', vertical_align: 'top' });
    } else if (c) {
        paint_label_at_line(paint(close), i, 'C', { color: 'red', vertical_align: 'bottom' });
    }
});

// Register signals separately
register_signal(isBreakout, 'Breakout');
register_signal(isCapitulation, 'Capitulation');