Volatility trading with the Bouhmidi-Bands
Most known indicators such as Bollinger Bands or Keltner Channel focus only on historical volatility. Bouhmidi bands follow a different approach, namely an indicator based on implied volatility.
Style tags: Implied Volatility, Volatility Trading, Trend Analysis
Asset class: Equities, Futures, Commodities
Dataset: Minutes / Hours
Description
The most famous volatility indicators such as Bollinger Bands , Keltner Channel , Donchian Channels , etc. all use the historical volatility of the underlying asset. However, volatility is determined not only by historical volatility but also by implied volatility. The additional analysis of implied volatility sharpens the view and improves trading.
The Bouhmidi Bands ® were developed by myself and are based on implied volatility. They calculate an expected daily bandwidth under the assumption of normally distributed returns. The bandwidth is based on 1σ or 2σ. This means that an underlying closes with a probability of 68% or 95% within the expected Bouhmidi bandwidth at the end of the day. Check the historical development. The track record over the past 20 years shows a strong robustness of the indicator.
Benefits using Bouhmidi bands
- The Bouhmidi bands can be used to identify and filter "invisible" resistance and support that cannot be detected with simple chart analysis.
- The Bouhmidi bands can be used for different trading approaches. For example, they are suitable for mean reversion and volatility breakouts.
- If you combine the Bouhmidi bands with e.g. Keltner channel or Bollinger bands, you have the historical and implied volatility in one view in your tradingview chart.
Which underlyings can I trade with the Bouhmidi bands?
To determine the Bouhmidi bands, we need the underlying and the corresponding implied volatility index:
- S&P 500 - VIX
- DAX - VDAX-NEW
- Dow Jones - VXD
- Nasdaq 100 - VXN
- Gold - GVZ
- WTI - OVX
- Apple - VXAPL
- Amazon - VXAZN
- Google - VXGOG
- IBM - VXIBM
Most known indicators such as Bollinger Bands or Keltner Channel focus only on historical volatility. Bouhmidi bands follow a different approach, namely an indicator based on implied volatility.
Style tags: Implied Volatility, Volatility Trading, Trend Analysis
Asset class: Equities, Futures, Commodities
Dataset: Minutes / Hours
Description
The most famous volatility indicators such as Bollinger Bands , Keltner Channel , Donchian Channels , etc. all use the historical volatility of the underlying asset. However, volatility is determined not only by historical volatility but also by implied volatility. The additional analysis of implied volatility sharpens the view and improves trading.
The Bouhmidi Bands ® were developed by myself and are based on implied volatility. They calculate an expected daily bandwidth under the assumption of normally distributed returns. The bandwidth is based on 1σ or 2σ. This means that an underlying closes with a probability of 68% or 95% within the expected Bouhmidi bandwidth at the end of the day. Check the historical development. The track record over the past 20 years shows a strong robustness of the indicator.
Benefits using Bouhmidi bands
- The Bouhmidi bands can be used to identify and filter "invisible" resistance and support that cannot be detected with simple chart analysis.
- The Bouhmidi bands can be used for different trading approaches. For example, they are suitable for mean reversion and volatility breakouts.
- If you combine the Bouhmidi bands with e.g. Keltner channel or Bollinger bands, you have the historical and implied volatility in one view in your tradingview chart.
Which underlyings can I trade with the Bouhmidi bands?
To determine the Bouhmidi bands, we need the underlying and the corresponding implied volatility index:
- S&P 500 - VIX
- DAX - VDAX-NEW
- Dow Jones - VXD
- Nasdaq 100 - VXN
- Gold - GVZ
- WTI - OVX
- Apple - VXAPL
- Amazon - VXAZN
- Google - VXGOG
- IBM - VXIBM
Informacje o Wersji:
In this version I calculated the bandwidth for the S&P 500 with "SPX" and "VIX" instead of "DAX" and "VDAX-NEW"
Informacje o Wersji:
From now on you can easily apply the Bouhmidi-Bands to 20 different markets. From S&P500 over APPLE, Google to Gold, WTI, DAX and the VIX itself. Once you have added the indicator to your chart, you can easily select via settings the respective underlying (Underlying) and the associated volatility index (Volatility) you want to plot. By default its always: S&P 500 + VIX
Below you will find the corresponding pairs of Bouhmidi-Bands for the particular market you are analyzing:
S&P 500: SPX + VIX
Dow Jones: DJI + VXD
Nasdaq 100: NDX + VXN
Apple: AAPL + VXAPL
Google: GOOGL + VXGOG
IBM: IBM + VXIBM
Gold: GC1!+GVZ
WTI: CL1! + OVX
Eurostoxx50: SX5E + FVS1!
DAX40: DAX + DV1X
MDAX: MDAX + DV1X
AEX: AEX + FVS1!
CAC40: CAC40 + FVS1!
SMI: SMI + FVS1!
IBEX35: IBEX35 + FVS1!
OMX30: OMX30 + FVS1!
OBX: OBX + FVS1!
OMXC25: OMXC25 + FVS1!
VIX: VIX + VVIX
Below you will find the corresponding pairs of Bouhmidi-Bands for the particular market you are analyzing:
S&P 500: SPX + VIX
Dow Jones: DJI + VXD
Nasdaq 100: NDX + VXN
Apple: AAPL + VXAPL
Google: GOOGL + VXGOG
IBM: IBM + VXIBM
Gold: GC1!+GVZ
WTI: CL1! + OVX
Eurostoxx50: SX5E + FVS1!
DAX40: DAX + DV1X
MDAX: MDAX + DV1X
AEX: AEX + FVS1!
CAC40: CAC40 + FVS1!
SMI: SMI + FVS1!
IBEX35: IBEX35 + FVS1!
OMX30: OMX30 + FVS1!
OBX: OBX + FVS1!
OMXC25: OMXC25 + FVS1!
VIX: VIX + VVIX
Informacje o Wersji:
Two major fixes in this update:
-From default Bouhmidi-Bands a pinned to the right scale
-Repainting Issue is fixed - so you can use the replay function properly
-From default Bouhmidi-Bands a pinned to the right scale
-Repainting Issue is fixed - so you can use the replay function properly
Informacje o Wersji:
Many Thanks for the feedback and following - Here are some updates that you wanted:
- update includes from now on the possibility to use not only the first standard deviation of the Bouhmidi-Bands, from now on you can also use the 2 standard deviation or an individual one like e.g. 1.6
- From default Bouhmidi-Bands a pinned to the right scale and are fixed now, so that you can just plot them with to adjust
- update includes from now on the possibility to use not only the first standard deviation of the Bouhmidi-Bands, from now on you can also use the 2 standard deviation or an individual one like e.g. 1.6
- From default Bouhmidi-Bands a pinned to the right scale and are fixed now, so that you can just plot them with to adjust
Informacje o Wersji:
-Fixed title name
Informacje o Wersji:
updated chart
Informacje o Wersji:
For our indian community I have adedd following tickers:
- NIFTY 50
- BANKNIFTY
- INDIAVIX
- NIFTY 50
- BANKNIFTY
- INDIAVIX
Informacje o Wersji:
I am excited to announce that Bouhmidi-Bands are now available for Bitcoin and Ethereum! This powerful technical indicator is originally designed for the stock market, but since we now also have implied volatility indices for cryptocurrencies they can also be applied to help traders make more informed decisions and use volatility movements for their setups.
Settings:
Underlying: BTCUSD
Volatility: VOLMEX:BVIV
Underlying: ETHUSD
Volatility: VOLMEX:EVIV
Note: Since cryptomarkets are open 24/7 change SessSpec to "00:00 - 00:00"
Settings:
Underlying: BTCUSD
Volatility: VOLMEX:BVIV
Underlying: ETHUSD
Volatility: VOLMEX:EVIV
Note: Since cryptomarkets are open 24/7 change SessSpec to "00:00 - 00:00"