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Dear Listmembers,
Just adding my .02 $: Bollinger describes somewhere his BWI (Band Width Indicator) as
the width of the bands divided the average of the price:
4*(std(C,20))/mov(C,20,S).
I don't know if adding the moving average changes the usefulness of the prospection
anyway this is what J. Bollinger is suggesting.
I have written an exploration to spot stocks whose BWI has reached extreme low readings:
that is when the BWI is at lower than its highest level for the last 250 days divided 3.
Here is the formula:
hhv(4*(std(C,20))/mov(C,20,S),250)/3
The stocks that pass this screening usually are in a non-trending mood, or rather in an
horizontal trend where the B-Bands are normally support and resistance levels.
Otherwise there are cases where the the stock is just pausing before resuming the trend:
in this second case the BWI doesn't remain under the trigger level for a long time.
A further remark is that when the stock enters a low-BWI period, it is often retesting a
previous support or resistance.
Althoguht I think BWI extreme lows are an interesting way to find low risk / low
volatility stocks it doesn't give any clue as of the direction of the following move.
Alberto Torchio
Torino, Italy
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