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PureBytes Links
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(was Re: linear regression slope line)
> Am trying to find the encyclopedic post by one of the regulars about a year
> and a half ago on 50 ways to love your BB's <G>. If I find it, I'll post it.
> It's probably time BB's made the rounds again.
Below find an updated version. Oldest mailings at the bottom.
Email addresses were removed for privacy reasons.
Regards,
Ton Maas
ms-irb@xxxxxxxxxxxxxxxx
Dismiss the ".nospam" bit (including the dot) when replying and
note the new address change. Also for my Homepage
http://home.planet.nl/~anthmaas
***************************************************************************
BOSS - Synergy with Bollinger by John Lowe (publ. March98 issue TAM, Dutch TA-mag)
In this article John Bollinger gets mentioned to have insisted on using a Price/Close-indicator
in conjunction with a combined Price/Volume-indicator. For example Price as a moving or exponential
average, the Typical Price(High+Low+Close/3) or one of the other on this theme excisting variaties.
Bollinger strives for synergy wich has to be confirmed by two of three indicators based on:
closing-price, price and volume, the Bollinger Optimised Synergy System:
1st criteria -Bollinger Bands are best used in conjunction with Wilders' RSI(9 or 14), an indicator based on
closing-price
2nd criteria -Price and Volume, combined in the Chaikin Oscillator are the other part of the BOSS.
According to most analists, the Chaikin Oscillator, a diversed accumulation/distribuation line, is a very good
alternative for the OBV-indicator. Chaikin Oscillators' basics are that a whealthy trend will be confirmed by
a healty, positive volume-development in the trend-direction. The Chaikin Oscillator can be substituted
with the MFI.
Chaikin Oscillator formula:
Mov(cum(((C-L)-(H-C)/(H-L))*V),3,E)-Mov(cum(((C-L)-(H-C)/(H-L))*V),10,E)
***************************************************************************
Money Flow Index
rev. 01/06/97
Taken from Stocks & Commodities, V. 12:8 (321-324): SIDEBAR: The Money Flow
Index
"The money flow index (MFI) is a volume-weighted form of the relative
strength index (RSI). Instead of using up closes versus down closes, the
MFI compares today's average price to yesterday's average price and then
weighs the average price by volume to calculate money flow (MF). The ratio
of the summed positive and negative money flows are then normalized to be
on a scale of zero to 100."
Here are the MetaStockT formulas for the Money Flow Index:
Positive Money Flow:
sum ( if ( typ( ) ,> ,ref ( typ ( ) ,-1 ) ,V * typ ( ) ,0 ) , PERIODS)
Negative Money Flow:
sum ( if ( typ( ) ,< ,ref ( typ( ) ,-1) ,V * typ ( ) * -1 ,0 ) , PERIODS)
Money Flow Ratio:
fml ( "Positive Money Flow" ) / fml ( "Negative Money Flow" )
Money Flow Index:
100 - ( 100 / ( 1 + fml ( "Money Flow Ratio" ) ) )
***The time periods are controlled by PERIODS in the Positive and Negative
Money Flow formulas.
***************************************************************************
Equity Analytics, Ltd.
Phone: 516-696-9784 Fax: 516-696-9788
E-Mail: technicalanalysis@xxxxxxxxxxxxxxxxxxx
Equity Analytics provides research and analysis such as: portfolio modeling advisement, IPO assistance, individual
company profiles, sector analysis, and hedging strategies with derivatives for institutions.
--------------------------------------------------------------------------------
On Balance Volume (OBV)
formula:
(if(c > ref(c,-1),1,-1) * volume) + PREV
This is part of a larger Technical Analysis site provided by Equity Analytics, Ltd.
Personally, I don't care too much to look at volume bars on the bottom of a chart. I've never felt it was precise enough
to gain much insight from other than to get a general idea as to how volume is running. Also, it's hard to relate volume
to price with just volume bars.
This is why I consider On Balance Volume to be such a useful indicator. It was developed by Joseph Granville. On Balance
Volume creates a volume line along the bottom of a price chart. OBV is relatively easy to construct. We first start with
a beginning number. It should be relatively high. I use 50,000. Then, on day one, if the close is positive, that days
volume is added to the 50,000. If the days close was lower, the volume is subtracted. So on up days, volume is added.
And on down days, the volume is subtracted. The result is a fluctuating line.
The value of the On Balance Volume is that it generally is a precursor to a change in trend. The holding is that smart
money leaves a security first when it is near a top; and also that the smart money is buying when a security is near a
low. When the general public catches on to a security's rise in price, volume will increase substantially and the OBV
line will increase rapidly faster. Conversely, On Balance Volume will start to decrease while price is still rising.
This indicates that the smart money is leaving the security.
Another valuable aspect of On Balance Volume is when divergence's occur. When OBV is decreasing while the price is
increasing, a signal is generated that the rally may not be as solid as it appears. When price is declining and OBV is
increasing, it is a sign that the investor shouldn't become too bearish. The decline may not last too long.
written and copyrighted by:
Charles J. Kaplan, President, Equity Analytics, Ltd.
***************************************************************************
Equity Analytics, Ltd.
Phone: 516-696-9784 Fax: 516-696-9788
E-Mail: technicalanalysis@xxxxxxxxxxxxxxxxxxx
Equity Analytics provides research and analysis such as: portfolio modeling advisement, IPO assistance, individual
company profiles, sector analysis, and hedging strategies with derivatives for institutions.
--------------------------------------------------------------------------------
Bollinger Bands
This is part of a larger Technical Analysis site provided by Equity Analytics, Ltd.
Bollinger Bands are envelopes which surround the price bars on a chart. Bollinger Bands are plotted two standard
deviations away from a simple moving average. This is the primary difference between Bollinger Bands and envelopes.
Envelopes are plotted a fixed percentage above and below a moving average. Because standard deviation is a measure of
volatility, the Bollinger Bands adjust themselves to the market conditions. They widen during volatile market periods
and contract during less volatile periods. Bollinger Bands become moving standard deviation bands.
Bollinger Bands are displayed with a third line. This is the simple moving average line. The time period for this moving
average can vary. However, Mr. Bollinger recommends 10 days for short term trading, 20 days for intermediate term
trading, and 50 days for longer term trading.
Additionally, the standard deviation value can be varied. Many technicians increase the value of the standard deviation
from 2 standard deviations to 2-1/2 standard deviations away from the moving average when using a 50 day moving average.
Conversely, many technicians lower the value of the standard deviation from 2 to 1-1/2 standard deviations away from the
moving average when using a 10 day moving average.
An important thing to keep in mind is that Bollinger Bands do not generate buy and sell signals alone. They should be
used with another indicator. I prefer to use Bollinger Bands with RSI. This is because when price touches one of the
bands, it could indicate one of two things. It could indicate a continuation of the trend; or it could indicate a
reaction the other way. So Bollinger Bands used by themselves what they need to know. Which is when to buy and sell.
MACD could be substituted for RSI.
However, when combined with an indicator such as RSI, they become quite powerful. RSI is an excellent indicator with
respect to overbought and oversold conditions. Generally, when price touches the upper Bollinger Band, and RSI is below
70, we have an indication that the trend will continue. Conversely, when price touches the lower Bollinger Band, and RSI
is above 30, we have an indication that the trend should continue.
If we run into a situation where price touches the upper Bollinger Band and RSI is above 70 (possibly approaching 80) we
have an indication that the trend may reverse itself and move downward. On the other hand, if price touches the lower
Bollinger Band and RSI is below 30 (possibly approaching 20) we have an indication that the trend may reverse itself and
move upward.
Above, I have talked about the use of a second indicator to work with Bollinger Bands. Avoid the trap of using several
different indicators all working off the same input data. If you're using RSI with the Bollinger Bands, don't use MACD
too. They both rely on the same inputs. You might consider using On Balance Volume, or Money Flow. RSI, On Balance
Volume, and Money Flow, rely on different inputs. They measure different things. They can be used together as further
confirmation of a trend. The technical term for this is 'Avoiding Multicolinearity'.
written and copyrighted by:
Charles J. Kaplan, President, Equity Analytics, Ltd.
***************************************************************************
(BOL-V) Bollinger Band Volatility
Stocks&Commodities' articles-writer John Forman published his Volatility Analysing & Trading - strategies
for Trend and Range Trading, the Volatile and Non Volatile Markets - in the March98-No.10-p.17
issue of TAM, Dutch TA-magazine, by Tripple Assets NL, Maastricht-the Netherlands.
E-mail:Triple.Assets@xxxxxxxxxxxx
{VolaBB setup (Close,20,S,2)+0.20 and -0.20}
formulas:
name: BbandBot-Vola
Mov(c,20,s)-(2*stdev(c,20))*1.002
name: BbandTop-Vola
Mov(c,20,s)+(2*stdev(c,20))*0.998
Trading System:
Enter long : Close < BbandBot-Vola
Exit long : Close < Ref(Close,-1)
Enter short : Close > BbandTop-Vola
Exit short : Close > Ref(Close,-1)
Rules: (volatility scale in percents)
Enter long when close is within 0.20% range of BbandBot-Vola
Exit long when market declines
Enter short when close is within 0.20% range of BbandTop-Vola
Exit short when markets advances
***************************************************************************
(BOL-H) Bollinger Band %B Histogram
((C+2*Std(C,20)-Mov(C,20,S))/(4*Std(C,20)))*100
right-click the indicator's properties, select style and then the bars as histogram
***************************************************************************
(BOL-C) Bollinger Band Crossover
John Bollinger observed that if Trading Bands were constructed based on Volatility of price, they would would contract
and expand according to market forces, more precisely matching the price movement and identify overbought and oversold
levels on the basis of observed volatility.
Construction:
In the construction of Bollinger Bands, Standard Deviation of price (SD) is used as the measure of volatility. SD is
determined in the following manner:
If:
P = Number of Periods considered and
Nsd = Number of Standard Deviations used
Then:
MA = P-Period Exp Moving Average of current bar's Close
SUM = (Close, - MA)2 + (Close 2 - MA)2 + ... + (Closep - MA)2
SD = (Square Root of SUM)/P
Plot a P-Period Exp Moving Average of the Close. For each bar, plot MA + (Nsd * SD) to derive the upper band. For each
bar, plot MA - (Nsd * SD) to derive the lower band. MetaStock and other programs use High and Low rather than Close in
the calculation for MA to yield MA high and MA low. This also yields a separate SD value for both the upper and lower
bands; SD high and SD low. SD high is then added to the MA high and SD low is subtracted from MA low to yield the upper
and lower bands, respectively. This appears to yield slightly better results.
Parameters:
Periods: (P) The number of periods used in the Moving Average and Standard Deviations. Deviations (NSD): The number of
Standard Deviations used in the calculation.
Trading System:
Bollinger observed that price moves originating at one band will usually travel to the other band. The Bollinger Band
System trades when the Close enters the band (similar to the Trading Band system discussed previously).
The bands expand and tighten according to higher and lower volatility levels. This system also shows strong moves in
which price originated at one band and moved decisively to the other band. This is the type of signal the system is
attempting to identify. As with the Trading Band system, the Bollinger Band system works well in Trading Range markets.
***************************************************************************
(BOL-T) Bollinger Bands w/ ADX
Linda Bradford Raschke, one of the Market Wizards interviewed in Jack Schwagger's book, The New Market Wizards, recently
described a system she uses to trade short-term moves, based on ADX and Bollinger Bands. ADX is used to detect a
retracement from the trend, and Bollinger Bands are used to establish entry and exit points after the retracement is
detected using ADX.
Construction:
First, a 2.4 Standard Deviation, 20-Period Bollinger Band is drawn. Bollinger Bands are defined in the Bollinger Band
Trading System. A 30-Period ADX line is then drawn for reference. ADX is defined in New Concepts in Technical Trading
Systems by Welles Wilder.
Parameters:
EMA Periods: The number of periods used in constructing the base moving average for the Bollinger Bands.
Deviations: The number of standard deviations used in the Bollinger Band calculation.
ADX Level: The level for ADX at which the system assumes that a trend is intact.
ADX Periods: The number of periods used in constructing the ADX line.
Trading System:
The System prepares to trade when ADX rises above 30. It then waits for the ADX line to drop slightly, indicating a
momentary change in trend. Subsequent to that event, the System takes a position when the price line moves back to the
Exponential Moving Average which forms the center of the Bollinger Band. The trade is then managed with tight stops. On
a short-term basis, the trade should make a good move in the direction of trend (following the retracement).
The system chooses short-term entry points with the trend, after detecting a slight retracement. The system trades
infrequently, but is usually correct.
*************************************************************************
From: Von Hef
Subject: Re: Bollinger Bands
>
> Hello Bill,
> Yes, both are the same indicator.....use the one from the web page.
>
> Best wishes,
> Adam Hefner.
>> -----Original Message-----
>> From: Bill Saxon
>> Subject: Re: Bollinger Bands
>>>
>>>
>>> Do these two sets of formulas give the same Indicator??
*************************************************************************
From: Von Hef
Subject: Re: Bollinger Bands
> Hehe......pays to check the web page first!
>
> Best wishes,
> Adam Hefner.
> _____________________
>
> -----Original Message-----
> From: Christian Baude
> Subject: Re: Bollinger Bands
>>
>> Hot off the Equis Web Page:
>> Better Bollinger Bands - Dennis McNicholl, 1998 October Futures Magazine
>>
>> Tighter Bollinger Bands when markets are trending.
>>
>> pds:=Input("Periods",2,200,20);
>> sd:=Input("Standard Deviations",.01,10,2);
>> alpha:=2/(pds+1);
>> mt:=alpha*C+(1-alpha)*(If(Cum(1)<pds,C,PREV));
>> ut:=alpha*mt+(1-alpha)*(If(Cum(1)<pds,C,PREV));
>> dt:=((2-alpha)*mt-ut)/(1-alpha);
>> mt2:=alpha*Abs(C-dt)+(1-alpha)*PREV;
>> ut2:=alpha*mt2+(1-alpha)*PREV;
>> dt2:=((2-alpha)*mt2-ut2)/(1-alpha);
>> but:=dt+sd*dt2;
>> blt:=dt-sd*dt2;
>> dt;
>> but;
>> blt
>>
>> -= Chris ß =-
>> Using MetaStock 6.5 | FastTrack | FastRUBE | FastTools | TC2000
>>
*************************************************************************
From: Von Hef
Subject: Bollinger Bands
> In the Oct issue of "Futures" there is an article written by
> Dennis McNicholl called "Better Bollinger Bands". In his
> article he describes how in a trending market the center
> band of the B.B. will shift away from the "mean" value of
> the price, and that the two outer bands will shift outward
> to such an extent that the envelope loses its utility as a
> volatility gauge (these are his words... not mine).
> As usual "Futures" only posted the TradeStation code,
> so this is my conversion from it. He called the Indicator
> "Denvelope", and it runs the bands much closer.....
> similar to "Standard Error Bands".
>
> {Denvelope}
> {Better Bollinger Bands}
> Lb:=Input("Look-Back Period ?",3,100,20);
> De:=Input("Band Deviation ?",.5,3,2);
> Alp:=2/(Lb+1);
> Mt:=Alp*CLOSE+(1-Alp)*PREV;
> Ut:=Alp*Mt+(1-Alp)*PREV;
> Dt:=((2-Alp)*Mt-Ut)/(1-Alp);
> mt2:=Alp*Abs(C-Dt)+(1-Alp)*PREV;
> ut2:=Alp*mt2+(1-alp)*PREV;
> dt2:=((2-Alp)*mt2-ut2)/(1-Alp);
> But:=Dt+de*dt2;
> Blt:=Dt-de*dt2;
> But;
> Dt;
> Blt;
>
> Best wishes,
> Adam Hefner.
*************************************************************************
From: Laurent Gittler
Subject: Re: Bollinger Band parameters
> John Bollinger says 20 and 2 the same for medium term,
> He said also 10 and 1 for short term 50 and 2.5 for long term consideration.
>
> -----Original Message-----
> From: Bill Saxon
> Subject: Re: Bollinger Band parameters
>
> >They are the same - 20 and 2. The fact that weekly and monthly data takes
> >care of plotting for intermediate and long term consideration.
>
> >-----Original Message-----
> >From: leo
> >Subject: Bollinger Band parameters
> >>
> >>Hi,
> >>
> >>I looking for the standard Bollinger Bands parameters in a case of a
> >>weekly, and a monthly chart.
> >>
> >>For a daily chart the parameters are 20 day Average and 2 as standard
> >>deviation.
> >>
> >>Could somebody indicate me these parameters for a weekly and monthly chart?
> >>
> >>Robert Vialet.
>
*************************************************************************
From: Fred Bender
Subject: Re: Bolliger System
> Jean-Michel,
>
> It looks to me as if you need something like the Bandwidth indicator, which
> you can then test to see how much it increases or decreases over a set
> period of time.
>
> The formula, using 20 bars, is:
>
> Bandwidth
> (mov(c,20,s)+(2*(std(C,20)))) - (mov(c,20,s) - (2*(std(c,20)))).
>
> Good luck.
> Fred Bender
>
> Jean-Michel Daniele wrote:
>
> > Hi everybody,
> >
> > At present, I am working on a system tester based on several indicators
> > and one of the buy signal is given by the behaviour of both top and
> > bottom Bolliger band. It is the first time I write my own system and
> > even if I am putting all my willing in it there is one problem I can go
> > through. I hope somebody will be able to enlight my nights.
> >
> > Here is the problem, I would like to write a formula that could give a
> > buy signal when the bolliger bands divergence increase more than a
> > certain percentage.
> >
> > The sell signal will be triggered when the Bolliger band divergence
> > would decrease more than a certain percentage from their maximal
> > divergence.
> >
> > That is what I wrote:
> >
> > Divergence( BBandBot(CLOSE,20,S,2), BBandTop(CLOSE,20,S, 2),opt1)
> >
> > Any help to a newbie will be greatly appreciated,
> >
> > have a nice day!
> >
> > J.-M.Daniele
*************************************************************************
From: Steve Karnish
> Walter,
>
> ((C+2*Std(C,20)-Mov(C,20,S))/(4*(Std(C,20)))*100)
>
> "Tweak" the formula to obtain your desired variables.
*************************************************************************
From: Onno Goedknegt
> Walter,
> Here it is:
>
> ((C-BBandBot(C,21,S,2))/(BBandTop(C,21,S,2)-BBandBot(C,21,S,2)))
>
> Onno
>
> At 10:22 27-8-98 -0400, you wrote:
> >Does anyone have a favourite formulation to normalize Bollinger Bands as
> >an oscillator.
> >
> >I want to use 21 day Bollinger Bands, 2 standard deviations and 1 standard
> >deviations away from the moving average in an oscillator that will swing
> >between overbought and oversold levels for easy comparison to other
> >oscillators.
> >
> >Walter Lake
*************************************************************************
From: Alberto Torchio
> Jim,
>
> You're quite right: this formula I am using with Windows On Wall Street. It's similar to
> MS language but not totally...
>
> > > ((c+std(c,20,2)-mov(c,20,s))/(std(c,20,4)))*100
>
> Should read instead:
>
> ((c+2*stdev(c,20)-mov(c,20,s))/(4*stdev(c,20)))*100
>
> Alberto Torchio
*************************************************************************
From: Jim
> I copied that formula into MS 6.5, and it doesn't compute. MS is looking for
> a ")" after the 20 in the "((c+std(c,20,2)", which tells me it interprets
> "std" as "stdev" which uses just (data array, periods). Actually, I find no
> function "std" in MS.
>
> Is "std" a MS function? Or is this a user written function? If it is a user
> written function could you please send it to the list. Thanks.
>
> Jim
*************************************************************************
From: Alberto Torchio
> Steve,
>
> Thank you for sending me your formula: ufortunately I have found little time to test it
> (until now).
>
> There is however, something that amazes me: the formula gives a plot similar to that of
> the Bollinger %b, wich is nothing more nothing less a stochastic of the price compared
> to the width of the band.
>
> Here is my formula:
>
> ((c+std(c,20,2)-mov(c,20,s))/(std(c,20,4)))*100
>
> As you're going to see it usually oscillates between 0 and 100, just like stochastic
> does. But, a wider move is allowed whereas readings above 100 or below 0 reflect closes
> above the higher band or below the lower. But you can see for yourself plotting the
> formula...
>
> Furthermore. As I stated in my earlier posting the formula of the BWI allows you to
> chart exactly the width of the band, so to spot low (or high) volatility. As far as I
> understand, the Histogram gives you no clue about the width, but only about the position
> of the price between the band. Therefore, I have taken a closer look at both indicators
> together to see if any relationship could be discerned.
>
> As a result, what I would like to have is the following: rising volatility (rising BWI,
> possibly further a trigger level) + extreme readings (over 2, or below -2) of the
> Histogram. This would give a clue of the direction AND the strenght of the trend. I
> would sell low readings of Histogram, and buy high readings.
>
> On the other hand, if extreme readings of the Hisogram occur at low BWI levels, this
> would rather mean that the trend is weak and a reversal is possible.
>
> Alberto Torchio
> Torino, Italy
*************************************************************************
From: Steve Karnish
> Alberto:
> Many listmembers supplied me with the formula to plot the
> distance between the standard deviations created with Bollinger
> Bands. After many hours of examination I was surprised to find
> that large moves start: not only when the bands narrow (as
> suggested by Johhny B. and others), but, just as many big moves
> start when the bands are at their widest point. Also, as you
> and others have pointed out: at the narrowest or at the widest
> points, there is nothing inherent in this plot to signal
> direction.
>
> Recently, the "group" was able to supply me with the formula for
> making a Histogram out of the "bands". I find this the most
> useful application of Bollinger's formula. The following is the
> picture I draw:
>
> ((C+2*Std(C,20) - Mov(C,20,S)) / (4*Std(C,20)))*4 - 2
>
> Under "properties", I then drop in +2 and -2 (because I'm not
> bright enough to program them in permanently). I think this is
> a much better view of the bands. As the price moves up and down
> as a % of the band width: all the classic applications of other
> "oscillator type" indicators work well (divergence,
> support/resistance, and overbought/oversold conditions when the
> price exceeds the Standard Dev. of +/-2).
>
> This is just one of ten indicators that I use ...but, for
> traders trying to understand Bollinger's "envelopes", I think
> the reconfiguration is a simpler, cleaner view, that allows the
> technician to analyze the underlying issue without the
> "squiggles".
>
> Steve Karnish
> CCT
*************************************************************************
From: Alberto Torchio
Subject: Re: Bollinger Band Width
> 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
*************************************************************************
From: Brooke
> In a message dated 98-07-15 18:49:46 EDT, you write:
>
> << Brooke,
> Doesn't Width simplify to 4*(std(C,20))?
>
> Jim >>
>
> Yes indeed. Someone else sent me e-mail on that. I did have the shorter
> formula, but I overlooked it in my usual haste. Thanks for pointing it out.
>
> This:
>
> (Mov( C ,20 ,S ) + 2 * ( Std( C ,20 ) ))-(Mov( C ,20 ,S ) - 2 * ( Std( C ,20 )))
>
> is equal to this:
>
> 4 * (Std(C,20))
>
> Brooke
*************************************************************************
From: Bill Saxon
> Steve, Maybe this is what you are looking for.
>
>
> ( ( Mov( C,20,S) + ( 2 * ( Std( C,20 ) ) ) )- ( Mov( C,20,S) - ( 2 * (
> Std( C,20 ) ) ) ) )
> / Mov( C,20,S)
>
*************************************************************************
From: Steve Karnish
Subject: Bollinger Band Width
> I'm horrible at programming language for formulas. Can anyone
> help me with a simple formula to track the daily width of a 20
> period Bollinger Band
> (a simple line defining the "spread" between the top and bottom
> band would be great). I'm trying to track the net difference of
> the bands as they narrow and widen. Recently, with help from
> the forum, I was able to formulate Bollinger Bands into a
> Histogram. Suddenly, the bands started to make a lot more
> sense. This new "look" compliments work that I do with
> regression oscillators, RSI, % of R, and candlesticks. New
> tools are great, especially when they point to profits.
>
> Thanks to any and all that can help,
> Steve Karnish
> CCT
*************************************************************************
From: John Sellers
> I use bollinger bands about the last price of the stock with two and half deviations plus an indicator "Money flow" with
> similar bollinger bands wrapped about that indicator. I look for cross overs for possible buys. Also touching or
> penetrations of the lower bollinger band of the indicator which show a divergence with the price movement indicate a
> good entry. For instance a second bottom of the indicator not as low as the previous one but coupled with two price lows
> where the latest one is the lower one would present an attractive entry point. Both ideas appear to function well when
> the market is in an up move but not in a corrective mode.
> John Sellers
*************************************************************************
-----Original Message-----
From: jeff f brady
>Try a bollingers web site!
>
>Also try a bolling er band cross over when the adx of the stock is over
>30! Very few signals but good when you get them.
***************************************************************************
-----Original Message-----
From: "Steve Karnish"
>There seems to be very little written about Bollinger Bands.
>The 32 page booklet is rather "thin". A few sites (i.e.,
>marketplayer.com) have reconstructed Bollinger Bands into a
>histogram. In this representation: the mean becomes a zero
>basis line and the standard deviations are parallel to the zero
>line. The price is then plotted in relation to the mean and the
>standard deviations. The same information gives you a different
>look and extensions beyond the standard deviations seem to be
>more symmetrical. There seems to be some interesting support
>and resistance that's not apparent when looking at the classic
>Bollinger Bands.
>A couple of months ago, I asked for help on constructing this
>Bollinger Band Histogram and received 3 or 4 replies (many
>thanks). I tried all the advice, but, could never recreate the
>histogram. I still am very interested in this variation. I
>believe this approach is a simpler and clearer graphic
>representation of Bollinger's formula. Any suggestions or help
>on the formula would be greatly appreciated.
>
>Steve Karnish
>CCT
***************************************************************************
-----Original Message-----
From: Yuwono
>For MSWin 6.5 :
>
>Indicator : BBHis
>
>2*(Std(C,20));
>-2*(Std(C,20));
>
>then click the indicator's properties, select color/style and then choose
>from the style menu : histogram graph
>
>For other MSWin version :
>
>You have to separate the formula
>
>Indicator : BBHisUp
>2*(Std(C,20))
>
>Indicator : BBHisUp
>-2*(Std(C,20))
>
>Yuwono
***************************************************************************
-----Original Message-----
From: "Shepherd"
>http://www.bollingerbands.com/undbb.htm
>Understanding Bollinger Bands - A booklet published by Traders Press
>Bollinger Bands are a popular method of technical analysis and have been
>incorporated into most of the analytical software currently available. This
>32-page booklet is the most comprehensive reference on the subject currently
>available.
***************************************************************************
-----Original Message-----
From: Bill Saxon
>Bollinger says these signals should always be filtered to determine if they are
>continuation or reversal in nature by using a price indicator such as RSI or
>MACD combined with a volume indicator such as On Balance Volume or Cash Flow.
>Of course, this doesn't always work, but what does?
>Bollinger offers a free pamphlet on his Bands as published at TASC at his web
>site. I was going to send you the address but it has changed. Perhaps someone
>else on the List has it. You may be able to find the article at TASC's site.
***************************************************************************
-----Original Message-----
From: "Richard Estes"
>Very true, the contraction is only reasonable use of BBands. Buy or sell the
>break, don't try to guess. The length of time in the contracted state
>approximates the length of time in the movement.
>Trading is based on contraction and expansion of price and volume.
>Richard Estes
***************************************************************************
-----Original Message-----
From: Scott Roycraft
>How can you tell which direction? I have noticed that some of the time when
>it moves outside the band it will pull back in forming a turning point. Other times
>it "slides" down or up the band continuing to make new lows or highs.
>About the only thing it tells me is like you said -- when it gets narrow some thing
> is about to happen. But I am constantly getting caught on the wrong side!
>There has to be something that can be combined with these bands to help in the
>direction of the break.
>
>Scott
***************************************************************************
-----Original Message-----
From: Tony Harring
>|you should look at Bollinger bands. I use them and change the parameters
>|to18 and 1.8 instead of default 20 periods and 2 standard dev. When it gets
>|very narrow it is due for a breakout in either direction.
> tony
***************************************************************************
-----Original Message-----
From: Philip Schmitz
Greetings A.J.
You have indeed sent me a masterpiece ("Everything you always wanted to
know about Bollinger Bands, but were afraid to ask!!") and I wish to convey
my seriously belated thanks. Please accept my apolgies for the long silence.
Have you seen Edward D. Dobson's book on BBs? It has a decent
bibliography, which might interest you.
The book itself is not expensive: $8.00.
I will get back to you when things come a little clearer about the BBs, that is :-)
Philip
***************************************************************************
A.J. Maas wrote:
ATTACHED 2x .TXT-files + 4x .GIF-files.
With reference to George(Equis Support)'s excellent reply (att.)
and "working out" on your info as well, ( me+EqSup) have
managed to come to the BB's masterpiece(see .GIFs), ahumm!!.
I hope you will find them to 'wealthen' your use and that they're able
to give you the 'clear' pic you'ld expect them to return.
Please, can you keep me+List informed on your 'achieving'
the BB and its extended accessories?
Answers below.
Reg. Ton.
-----Oorspronkelijk bericht-----
Van: Philip Schmitz
>1) In the floating dynamic zones I would simply
>substitute my "BB width" formula for the RSI(14)
>while leaving the rest of the formula unchanged.
>Is that correct?
See the attached formula 'BBAcc' - file and the .gifs for results.
>2) Could I also change the period of the moving
>average and the Stdev? This would probably be
>necessary because I often load futures contracts
>with considerably fewer periods than 200.
For best results, John Bollinger 'sticks' to '2' and '20' and
Jan van Gemeren to '1 + 1.5' ,
but here too, see the attachements for results and/or
like your "concocted one" keep distilling the brew.
>On the Equis BB page, could you explain the %BB to
>me? Does that mean the formula will return a plot
>that shows % of the BB range, as in Willimas %R?
B%B is a "square"(inner window) version of the Bollinger Bands.
B%B shows where the Price resides in the Band Width(range),
with the OB-OS levels 0 and 100 as horizontal lines:
Above 100 = Price is above the BB-Upper band/Overbought
Below 0 = Price is below the BB-Lower band/Oversold.
(Produces quite often early ob-os zone arrivals, start/end of a trend).
Williams%R I am not familiar with (enclosed on -3.gif for comparissing).
Note that all -x.gif's have the same "underlay/time-span".
A plot that shows % of the BB Width(range) is formula #116.
The same over 70-period is #117.
Note again that John Bollinger's time-span of 20 is the underlay.
'Yours' over 70-period with time-span 70 is #123 + #124.
Another note, the 'Equis' Band Width formula #114 is the BB-Ratio.
Widening Bands = High Ratio
Narrowing Bands= Low Ratio.
I received Equis George's reply when finishing the #xxx formulas,
but managed to make them visable in the 'last' .gif-file.
***************************************************************************
Attachments below:
--------------------------------------------------------------------------------
Indicator: Bollinger Bands Accessories - formulas for the use in Metastock60
rewritten by Ton Maas,Amsterdam-NL(080198) ref.: email-Philip Schmitz-MetaList
--------------------------------------------------------------------------------
Originals by John Bollinger(Bands etc.) and Jan van Gemeren(Dynamic OB/OS Zones)
Published by Equis(www.equis.com) and
Techn.Anal.Mag.-TAM
E-mail:Triple.Assets@xxxxxxxxxxxx
--------------------------------------------------------------------------------
Note1: Copy the complete "first" line as the indicator name and second/third
line as the "formula" contents. Make sure not to change the file-lines for the
indicators to function properly.
--------------------------------------------------------------------------------
Note2:Indicators(formulas #130-#134) should be dropped in
the "(#122)-indicator"- inner window
--------------------------------------------------------------------------------
Bollinger Bands-Upper Band 20(#110)
Mov( C,20,S)+(2*(Stdev(C,20)))
Bollinger Bands-Lower Band 20(#111)
Mov( C,20,S)-(2*(Stdev(C,20)))
Bollinger Bands-Middle Band 20(#112)
Mov( C,20,S)
Bollinger %B 20-2-0-s-c (#113)
((C+2*Std(C,20)-Mov(C,20,S))/(4*Std(C,20)))*100
Bollinger Bands-band width ratio 20(#114)
((Mov( C,20,S)+(2*( Stdev( C,20))))-( Mov( C,20,S)-(2*( Stdev( C,20)))))/Mov( C,20,S)
Bollinger Bands-band range 201 in Points (#115)
Fml("#110")-Fml("#111")
Bollinger Bands-band range 201Roc in % (#116)
ROC(( Fml("#110")- Fml("#111")), 1, %)
Bollinger Bands-band range 2070Roc in % (#117)
ROC(( Fml("#110")- Fml("#111")), 70, %)
Bollinger Bands-band range 20200Roc in % (#118)
ROC(( Fml("#110")- Fml("#111")), 200, %)
Bollinger Bands-Upper Band 70(#119)
Mov( C,70,S)+(2*(Stdev(C,70)))
Bollinger Bands-Lower Band 70(#120)
Mov( C,70,S)-(2*(Stdev(C,70)))
Bollinger Bands-Middle Band 70(#121)
Mov( C,70,S)
Bollinger %B 70-2-0-s-c (#122)
((C+2*Std(C,70)-Mov(C,70,S))/(4*Std(C,70)))*100
Bollinger Bands-band range 701 Roc in % (#123)
ROC(( Fml("#119")- Fml("#120")), 1, %)
Bollinger Bands-band range 7070Roc in % (#124)
ROC(( Fml("#119")- Fml("#120")), 70, %)
+2.5Dynamic C70 OB/OS Zones - TAM(#125)
{dynamics inner zone - deviation 1 - top}
Mov( C,70,S)+2.5*Stdev( Mov( C,1,S),70)
+3 Dynamic C70 OB/OS Zones - TAM(#126)
{dynamics outer zone - deviation 1.5 - top}
Mov( C,70,S)+(3*Stdev( Mov( C,1,S),70))
+0 Dynamic C70 OB/OS Zones - TAM(#127)
{dynamics "50" level}
Mov( C,70,S)
-2.5 Dynamic C70 OB/OS Zones - TAM(#128)
{dynamics inner zone - deviation 1 - bottom}
Mov( C,70,S)-2.5*Stdev( Mov( C,1,S),70)
-3 Dynamic C70 OB/OS Zones - TAM(#129)
{dynamics outer zone - deviation 1.5 - bottom}
Mov( C,70,S)-(3*Stdev( Mov( C,1,S),70))
+0 Dynamic OB/OS Zones - TAM Boll Bands(#130)
{dynamics "50" level}
Mov( Fml( "#122"),200,S)
+1 Dynamic OB/OS Zones - TAM Boll Bands(#131)
{dynamics inner zone - deviation 1 - top}
Mov( Fml( "#122"),200,S)+Stdev( Mov( Fml( "#122"),1,S),200)
+1.5 Dynamic OB/OS Zones - TAM Boll Bands(#132)
{dynamics outer zone - deviation 3.5 - top}
Mov( Fml("#122"),200,S)+(1.5*Stdev( Mov( Fml("#122"),1,S),200))
-1 Dynamic OB/OS Zones - TAM Boll Bands(#133)
{dynamics inner zone - deviation 1 - bottom}
Mov( Fml( "#122"),200,S)-Stdev( Mov( Fml( "#122"),1,S),200)
-1.5 Dynamic OB/OS Zones - TAM Boll Bands(#134)
{dynamics outer zone - deviation 1.5 - bottom}
Mov( Fml( "#122"),200,S)-(1.5*Stdev( Mov( Fml( "#122"),1,S),200))
***************************************************************************
-----Original Message-----
From: Equis Support <support@xxxxxxxxx
You might try something like comparing Band Width a moving average of
Band Width, maybe something like this:
(BBandTop(C, 70, E , 2) -BBandBot(C, 70, E , 2))>Mov(BBandTop(C, 70, E ,
2) -BBandBot(C, 70, E , 2),25,E)
You could also compare them on a percentage basis something like this:
(((BBandTop(C, 70, E , 2) -BBandBot(C, 70, E , 2))-Mov(BBandTop(C, 70, E
, 2) -BBandBot(C, 70, E , 2),25,E))/Mov(BBandTop(C, 70, E , 2)
-BBandBot(C, 70, E , 2),25,E))*100
George
Equis Support
***************************************************************************
-----Original Message-----
From: Philip Schmitz
Thanks for the speedy reply, A.J., I appreciate
the effort that went into it. Since my grasp of
technical analysis is tentative at best, let me
follow up with a question or two to make sure I've
understood the material.
1) In the floating dynamic zones I would simply
substitute my "BB width" formula for the RSI(14)
while leaving the rest of the formula unchanged.
Is that correct?
2) Could I also change the period of the moving
average and the Stdev? This would probably be
necessary because I often load futures contracts
with considerably fewer periods than 200.
On the Equis BB page, could you explain the %BB to
me? Does that mean the formula will return a plot
that shows % of the BB range, as in Willimas %R?
Applying the formula to 70 period BBs, would
entail change all the 20s to 70s, correct?
Philip
***************************************************************************
-----Original Message-----
From: A.J. Maas
ATTACHED 1x .txt-file.
Hi Philip,
-From the Equis Web-site the Bollinger formulas.
-From Dutch TAM-tech. anal. mag.- the floating Dynamic OB/OS Zones formulas.
(see .gif for results)
With a SMA(20) I use the Bollinger%B(20) indicator as well as the CCI(14), CMO(20),
RSI(14), Stoch(15,10,5) and BHR-BHMD5 for early signals/trades(stock).
Reg. Ton.
***************************************************************************
-----Original Message-----
From: Equis <www.equis.com
Bollinger Bands
rev. 01/06/97
"Trading bands are one of the most powerful concepts available to the
technically based investor, but they do not, as is commonly believed, give
absolute buy and sell signals based on price touching the bands. What they
do is answer the perennial question of whether prices are high or low on a
relative basis. Armed with this information, an intelligent investor can
make buy and sell decisions by using indicators to confirm price action.
But before we begin, we need a definition of what we are dealing with.
Trading bands are lines plotted in and around the price structure to form
an ''envelope". It is the action of prices near the edges of the envelope
that we are particularly interested in.."
Taken from Stocks & Commodities, V. 10:2 (47-51): Using Bollinger Bands by
John Bollinger
For further interpretation refer to the above article found in the February
1992 issue of Technical Analysis of Stocks and Commodities.
Bollinger Bands are built into MetaStock™, however you may prefer to
use the individual custom formulas.
The custom formulas for the components of the Bollinger Bands are as
follows:
Upper Band:
mov( C,20,S ) + ( 2 * ( std( C,20 ) ) )
Lower Band:
mov( C,20,S ) - ( 2 * ( std( C,20 ) ) )
Middle Band:
mov( C,20,S )
%B :
( ( C+2 * std( C,20 ) - mov( C,20,S ) ) / ( 4 * std( C,20 ) ) ) * 100
Band width :
( ( mov( C,20,S) + ( 2 * ( std( C,20 ) ) ) )- ( mov( C,20,S) - ( 2 * ( std(
C,20 ) ) ) ) )
/ mov( C,20,S)
***************************************************************************
-----Original Message-----
From: Philip Schmitz
Metastock 6.0 does not appear to provide an
indicator which shows the width of Bollinger
Bands, so I have concocted a simple one to suit my
own needs:
"Band Width" = BBandTop(C, 70, E , 2) -
BBandBot(C, 70, E , 2)
As a next step, I would like to devise an
indicator which tells me how the current value of
"Band Width" relates to the overall range of Band
Widths for a specified period, or, since my
interest is commodities, the life of the contract
- in other words all data loaded. Where, on a
percentage basis, does it fall?
Can you point the way?
Philip
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