MoBo

MoBo Bands - Momentum Breakout Indicator

Description

*The MoBo (Momentum Breakout) Bands indicator is a dynamic volatility-based trading tool that identifies potential trend reversals and momentum shifts in the market. Unlike traditional Bollinger Bands, MoBo Bands use asymmetric standard deviation multipliers to create upper and lower bands that adapt to price action, providing clear visual signals when price breaks through key levels.

*The indicator features color-coded bands that change from red to green (bullish) or green to red (bearish) based on breakout direction, filled cloud zones for enhanced visibility, and precise breakout arrows positioned at candle extremes. This makes it ideal for swing traders, day traders, and anyone looking to identify high-probability momentum shifts.

How to Use

• Signal InterpretationBullish Breakout (Green)
• Occurs when price closes above the upper band
  
• Bands turn green and fill with green cloud
  
• Bright green arrow appears at the bottom of the breakout candle
  
• Indicates potential upward momentum and bullish trend continuation
  
• Consider long positions or holding existing longs
  
  Bearish Breakdown (Red)
• Occurs when price closes below the lower band
  
• Bands turn red and fill with red cloud
  
• Bright red arrow appears at the top of the breakdown candle
  
• Indicates potential downward momentum and bearish trend continuation
  
• Consider short positions or exiting longs
  
  Neutral Zone (Between Bands)
• Price consolidates between the upper and lower bands
  
• Bands maintain their previous color (green or red)
  
• No trading signals - wait for next breakout
  
• Good time to prepare entries or manage existing positions
  
• Trading StrategyTrend Following: Enter trades in the direction of the breakout arrow
  
  
• Green arrow = Go long
• Red arrow = Go short or exit longsConfirmation: Wait for the candle to fully close beyond the band before entering
  
  
• Avoid false breakouts by confirming the close
  
• Consider volume confirmation for stronger signals
  
• Exit Strategy:
• Exit longs when a red arrow appears (bearish breakdown)
  
• Exit shorts when a green arrow appears (bullish breakout)
  
• Use the opposite band as a profit target
  
• Risk Management:
• Place stops beyond the opposite band
  
• Use the midline (hidden by default) as a dynamic support/resistance level
  
• Adjust position size based on band width (volatility)
  
• Parameter Settings
• Length (10): Controls the lookback period for calculations - shorter = more responsive, longer = smoother
  
• Num Dev Up (+0.8): Upper band multiplier - increase for wider bands
  
• Num Dev Down (-0.8): Lower band multiplier - decrease for wider bands
  
• Colored Mobo: Toggle band color changes on/off
  
• Colored Fill: Toggle cloud fills on/off
  
• Break Arrows: Toggle breakout arrows on/off
  
• Show Alerts: Enable/disable alert notifications
  
  Best Practices
• Works best in trending markets with clear directional moves
  
• Combine with other indicators (RSI, MACD, volume) for confirmation
  
• Adjust length and deviation parameters based on timeframe and asset volatility
  
• Use higher timeframes (4H, Daily) for stronger, more reliable signals
  
• Backtest settings on your specific instrument before live trading