Heikin-Ashi smoothed percent b for divergence timing

A historical workflow builds percent b from an envelope of Bollinger Bands, steadies that series with Heikin-Ashi and further lag control, and then reads price-indicator divergence while price remains between the outer bands.

Bands as a volatility map

A standard band envelope uses a 20-bar simple moving average as the middle line, with outer bands two closing-price standard deviations above and below that average.

Band width widens when trending prices are more volatile and narrows when prices consolidate nearer the mean, so changing bandwidth is a volatility context rather than a direction rule.

Percent b as a location series

Percent b locates the close between the outer bands and can be scaled from 0 to 100, with readings able to move outside that range when price overshoots the envelope.

An unsmoothed percent-b series can print highs, lows, and divergences ahead of price turns, but remains too choppy for reliable bar-by-bar timing.

Heikin-Ashi smoothing and lag control

Substituting a Heikin-Ashi averaged close for the raw close is the first smoothing change and reduces oscillator noise with only a small added delay.

Further lag control applies an eight-period triple exponential average twice to the Heikin-Ashi series and adds back the difference before percent b is computed.

A later construction variant

A later variant shortens the lookback from 20 to 18 bars, replaces the simple middle average with a weighted average, and applies the triple exponential average to the standard-deviation bands.

Instead of fixed 0, 50, and 100 rails, the finished oscillator is read against bands set 1.6 standard deviations from the 50 line over a 63-bar lookback.

Regular and hidden divergence

Hidden divergence of lower price highs against higher oscillator highs is read as continuation, while regular divergence of lower price lows against higher oscillator lows is read as a reversal candidate.

Regular and hidden divergences, together with clearer oscillator turning points, are used to form entry and exit hypotheses while price remains between the outer bands.