Indicator Bubble And Drops refers to the type of predictive indicators, i.e., the indicator, based on its analysis, tries to predict the further movement of the price.
Bubble And Drops Technical Indicator
This indicator was based on the hypothesis of waves of their oscillation and subsequent damping, using these elements in the analysis of the graph can be more likely to predict the further movement of prices based on the “experience” of historical data.
In mathematics of calculations of the indicator the formula of the elementary damping is used:
f (x) = a / x * sin (x * a) ,
where a is the amplitude ;
Amplitude in this case is calculated as the difference between the opening price and the closing price.
Bubble And Drops Technical Indicator parameters:
historyDeep – the number of candles (bars) in the history for which the indicator will be calculated;
future – the number of bars in the future for drawing the indicator.
Description of the parameters:
the parameter “historyDeep” is responsible not only for the history of the chart, but also for the first bar from which the calculation of the indicator will begin. For example, if the parameter contains the number “150” , it means that the indicator reads 150 candles (bars) from the end to the story and on the 150th candle the calculation of the waves starts from the beginning to the end, all the candles that stand behind the 150th will not be Take into account, and the indicator line will be horizontal. In this case, the larger the value of “historyDeep” , the greater will be the amplitude of oscillations of the indicator line;
the line that is responsible for drawing future movements is marked (by default) in a different color, and the “future” parameter allows you to set the number of desired bars in the future for the indicator predictions, respectively, the larger this parameter, the longer will be the “predictive” part of the indicator line.
In this indicator, you can also adjust the color, appearance and thickness parameters of any of the indicator lines.
How to use Bubble And Drops Technical Indicator
since this indicator alone predicts the price behavior in the future, it is likely that one can rely on these predictions, adding to this a strict management and setting a low percentage risk in each transaction to build a whole trading system based on just one indicator.
But as practice shows, trading using only one forex indicator is often not very rational, and sometimes even dangerous for your deposit. Therefore, the author suggests using one or two confirmatory forex indicators, which will filter most false signals.