Bollinger Bands

Interpretation

Bollinger Bands are a type of envelope, developed by John Bollinger. However, where envelopes are plotted at a fixed percentage above and below a moving average, Bollinger Bands are plotted at standard deviation levels above and below a moving average. When displaying Bollinger Bands in Program Investor, you'll be asked to enter the number of periods in the bands and the number of standard deviations between the bands and the moving average. Mr. Bollinger recommends default values of "20" for the number of periods, "simple" for the moving average method, and "2" deviations. He notes that periods of less than 10 periods do not appear to work very well. Program Investor plots Bollinger Bands on the security prices. This interpretational comments refer to the bands on the security closing price. As far as the spacing between Bollinger Bands is based on the standard deviation of the security, the bands widen when the security becomes more volatile, and contract when the security becomes less volatile. Mr. Bollinger notes the following characteristics of Bollinger Bands:

• Sharp price changes tend to occur after the bands tighten, as volatility lessens.
• When prices move outside the bends, a continuation of the trend is implied.
• Bottoms/tops made outside the bands, followed by bottoms/tops, made inside the bands call for reversals in the trend.
• A move that originates at one band tends to go all the way to the other band. This observation is useful when projecting price targets.

BandWidth จะสื่อถึงการเริ่มต้นของเทรนเมื่อมันเข้าหาจุดต่ำและ Bollinger แคบเข้าหากัน ในช่วงปรายสามารถใช้ดูว่ามันมีค่าสุงมากและ New High ของ chart เป็น divergence กับตัว bandwidth ในกรณีที่ดูยากใน Daily ให้ดูจาก Weekly Keltner เหมาะกับเข้าดู Chart แล้วและ มี pattern ถ้วย, W, ฐานแบน การจะเข้าไปในช่วงเงียบ ดู ที่ Bollinger band อยู่ ข้างใน Keltner แสดงว่าราคาอยู่ในช่วงพักตัว เมื่อเริ่มขาขึ้นราคามักจะสูงกว่า Keltner ท้ายก็ดูว่า Momentum อยู่ในแดน บวก

Parameters

• Price - You can choose price for calculation (Open / High / Low / Close).
• Periods - Specify the number of periods to use when calculating. The term "time periods" refers to days if the chart contains daily data, weeks for weekly data, hours for hourly data, etc.
• Deviation Up - Specify the number of standard deviations by which to shift the upper bands.
• Deviation Down - Specify the number of standard deviations by which to shift the lower bands.
• Horizontal Shift - Specify the number of periods to shift the Bollinger Bands. For example, enter "5" to shift them five periods to the right; enter "-5" to shift them five periods to the left; etc.
• NBars

Default Setting