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I don't know how come there are so many opinions on this. 1.28155 is the
standard deviation equivilant of 90%. If you plotted a 1.28155 standard
deviation line above prices on a chart, 90% of the prices should
theoretically fall below that line. If the market follows the bell curve
then this would be true.
Since you are probably using a lower standard deviation line also, the
bottom line says that 90% of all values will be above the lower line. That
leaves two 10% tails. So in fact 80% of the values should occur in between
the 2 lines.
If you want to know the standard deviation that is equivilant to 90%, I
gaurantee it is 1.281.
If you want the area between the 2 lines to equal 90% then you need the
standard deviation that correlates with 95%. This will leave 5% tails on
the normal distribution curve. The standard deviation that correlates to
95% probability is 1.645.
Michael
-----Original Message-----
From: owner-metastock@xxxxxxxxxxxxx
[mailto:owner-metastock@xxxxxxxxxxxxx]On Behalf Of A.J. Maas
Sent: Thursday, October 26, 2000 10:12 PM
To: Metastock-List
Subject: Re: Simple question on Bollinger Bands
The mean=middle=0
and
100%=da width difference between "+1 stdev"{+100%} and "-1 stdev"{-100%}
thus
100%{2*1}=2*stdev(da,pds) {width is then mean + 1*stdev up +1*stdev down}
and
50%{2*0.5}=1*stdev(da,pds)
then
90%{2*0.9}=1.8*stdev(da,pds)
Regards,
Ton Maas
ms-irb@xxxxxxxxxxxxxxxx
Dismiss the ".nospam" bit (including the dot) when replying.
Homepage http://home.planet.nl/~anthmaas
----- Oorspronkelijk bericht -----
Van: "Lionel Issen"
Aan: <metastock@xxxxxxxxxxxxx>
Verzonden: dinsdag 24 oktober 2000 4:23
Onderwerp: Re: Simple question on Bollinger Bands
> I cant find my statistics book, but I think its close to 2 std dev.
> Lionel Issen
> lissen@xxxxxxxxx
> ----- Original Message -----
> From: "Alberto Torchio" <atorchio@xxxxxxxxx>
> To: "Realtraders" <realtraders@xxxxxxxxxxx>
> Sent: Monday, October 23, 2000 2:27 AM
> Subject: Simple question on Bollinger Bands
>
>
> > Dear Listmembers,
> >
> > I have been asked a simple question on Bollinger Bands and was unable to
> > answer...
> > Could anyone tell me the number of standard deviations allowing to
contain
> > within the bands 90% of price data?
> >
> > Alberto Torchio
> > Torino, Italy
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