--- In [email protected], "droskill" <[EMAIL PROTECTED]> wrote:
>
> Hey all - I'm trying to put together an indicator based on Standard
> Deviation. The difference, from, say Bollinger Bands in this case is
> that I want to show the Std Dev from a moving average in terms of 1,2
> and 3 standard deviations from mean, where mean is an N day moving
> average. So, the mean would be represented by a constant straight
> line on a chart, and then a line would go up/down around it.
>
> For an example, check this out:
>
http://www.indexindicators.com/charts/sp500-vs-sp500-50d-rsma-params-3y-x-x/
>
> I really don't know how to approach this - anybody have any
> thoughts/ideas? Or maybe someone has done it before (or it's in AB
> already) and I just haven't found it.
>
> Thanks!
I think %b is what you want.
%b = (last - lowerBB) / (upperBB - lowerBB)
(%b is derived from the formula for Stochastics.)
Using the standard BB parameters of +/- 2 sd:
+2, %b = 1.0
+1, %b = 0.75
0, %b = 0.5
-1, %b = 0.25
-2, %b = 0.0
If you need centered numbers you can subtract 0.5 from %b and multiply
the result by two, or whatever constant suits your ap. Again using the
defaults of +/- 2 sd:
%b_norm = (%b - 0.5) * 2.0
Which would give:
+2, %b = 1.0
+1, %b = 0.5
0, %b = 0.0
-1, %b = -0.5
-2, %b = -1.0
Or, again sing the default parms od +/1 2 sd, multiplying by 4 would
give you the intuitive number you seek:
+2, %b = 2.0
+1, %b = 1.0
0, %b = 0.0
-1, %b = -1.0
-2, %b = -2.0
Enjoy,
jab
www.bbands.com
