Bollinger breakout down event
A close below the lower Bollinger band: price unusually low against its recent average.
The indicator averages the last 20 closes by default, measures their sample standard deviation, and places a lower line two deviations under that average. A bar fires when its close is below that line, and that bar's own close is part of the average it is tested against. It flags a stretched low, not a confirmed breakdown, because nothing checks what price does afterwards.
How to read it
- Each marker sits on a one-minute candle that closed under the lower band. The band itself is not drawn.
- A run of markers on consecutive candles is one event. On a month of SPY one-minute bars at defaults, about 5% of bars carry a marker and events start about 25 times a day.
- An isolated marker is one close under the band with the next close back over it. A cluster means price kept closing under the band.
What it outputs
- Close below lower band
- Each bar whose close is under the lower band. The value on a marked bar is the close itself, and unmarked bars carry no value.
When it fires
A bar whose close is under the lower band, the average of the last window closes minus mult times their sample standard deviation. Each marker means that close is unusually low against the recent bars. It is a stretched-price flag, not proof that a breakdown has started.
Settings
- window
- Bars in the average and deviation, counting the current bar. Shorter windows track the last few minutes closely and react fast; longer windows average more history and move slowly, so the line shifts less from bar to bar.
- mult
- Deviations the lower line sits below the average. Higher values push the line down, so fewer closes qualify; at 4.25 or more on the default window it never fires. Lower values lift it toward the average, so more closes qualify.
- band
- Scales the line by one minus this value. Positive values lower it, so fewer closes qualify; negative values raise it, so more do. At 1 the line is zero and it never fires. A step of 0.001 moves the line about 0.1 percent of price.
Pitfalls
- The name says breakdown, but the indicator only tests one close against recent bars. The facts here do not measure what price did after a marker.
- The current close is part of its own average and deviation, so on a 20-bar window it can sit at most about 4.25 deviations below the average. Mult of 4.25 or more never fires, and a 10-bar window caps near 2.8.
- The default rates come from one month of SPY bars. Other symbols and volatility regimes will fire at different rates.