Bollinger b



Interpretation:

Bollinger %b is a bounded indicator which is based on Bollinger bands .

The higher the indicator is, the more we can consider that the security isoverbought and that its price may fall in the short term.The lower the indicator is, the more likely will be oversold and its price may goup in the short term.

These levels are commonly considered to be:- overbought: %b > 80- oversold: %b 20It is advise to adjust these levels with the volatility of the security where theindicator is applied.

Calculation:

%b = (Close - Lower Band) / (Upper Band - Lower band)

If price crosses the upper Bollinger band , this indicator will equal to 100. Inversely, it will equal to zero when price crosses the lower band. In cases where price moves further away from the limits of the Bollinger band , it will have values higher than 100 or lower than zero.




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