Hello John, Thanks for that.
Simple but effective. If you don't mind me saying, I think I prefer %b to BB themselves. I see you include the equation in your tutorial section. http://www.bollingerbands.com/services/bb/?page=5 Any tips on how to trade %b? BB (also known as brian_z) --- In [email protected], "bbands" <[EMAIL PROTECTED]> wrote: > > --- In [email protected], "droskill" <droskill@> 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 >
