MACD with Bollinger Bands Indicator for ThinkorSwim

This advanced indicator combines MACD (Moving Average Convergence Divergence) with Bollinger Bands to identify short-term trends and potential squeeze opportunities in ThinkorSwim charts. Below is the refined code and key insights for optimal usage.

Key Features

Dual Analysis: Visualizes MACD alongside Bollinger Bands as a lower study.
Trend Identification: Highlights bullish/bearish momentum via color-coded dots.
Customizable Inputs: Adjustable parameters for BB length, deviations, and MACD periods.

thinkScript Code

# TS_MACD_BB
# By Eric Purdy, ThinkScripter LLC
declare lower;
input price = close;
input BBlength = 10;
input BBNum_Dev = 1.0;
input MACDfastLength = 12;
input MACDslowLength = 26;
input MACDLength = 5;

def MACD_Data = MACD(fastLength = MACDfastLength, slowLength = MACDslowLength, MACDLength = MACDLength);
plot MACD_Dots = MACD_Data;
plot MACD_Line = MACD_Data;
plot BB_Upper = reference BollingerBands(price = MACD_Line, length = BBlength, Num_Dev_Dn = -BBNum_Dev, Num_Dev_Up = BBNum_Dev).UpperBand;
plot BB_Lower = reference BollingerBands(price = MACD_Line, length = BBlength, Num_Dev_Dn = -BBNum_Dev, Num_Dev_Up = BBNum_Dev).Lowerband;
plot BB_Midline = reference BollingerBands(price = MACD_Line, length = BBlength, Num_Dev_Dn = -BBNum_Dev, Num_Dev_Up = BBNum_Dev).MidLine;

BB_Upper.SetDefaultColor(Color.GRAY);
BB_Lower.SetDefaultColor(Color.GRAY);
BB_Midline.SetDefaultColor(Color.GRAY);
BB_Midline.SetStyle(Curve.SHORT_DASH);
MACD_Line.SetDefaultColor(Color.WHITE);
MACD_Dots.SetStyle(Curve.POINTS);
MACD_Dots.SetLineWeight(2);
MACD_Dots.AssignValueColor(if MACD_Line > MACD_Line[1] then Color.WHITE else Color.DARK_RED);
plot zero = 0;
zero.AssignValueColor(if MACD_Line < 0 then Color.RED else Color.GREEN);
zero.SetLineWeight(2);

👉 Download the script here

How to Use This Indicator

Bullish Signals

Entry: White dots appear and MACD line crosses above the upper BB band.
Confirmation: Zero line turns green.

Bearish Signals

Entry: Red dots appear and MACD line drops below the lower BB band.
Confirmation: Zero line turns red.

FAQ

1. What timeframes work best?

This indicator excels in short-term charts (5m–1h) for scalping or swing trading.

2. Can I adjust the Bollinger Band settings?

Yes! Modify BBlength and BBNum_Dev to match your strategy (default: 10 periods, 1.0 deviation).

3. How do I avoid false signals?

Combine with volume analysis or higher timeframe trends for confirmation.

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Pro Tips

Squeeze Alerts: Narrowing BB width indicates reduced volatility—prepare for breakout trades.
Divergence: MACD/price divergence signals potential reversals.

Note: Remove all hyperlinks except the provided OKX link for compliance.