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Why are you all messing around with Bollinger indicators, when the
BBands are just MAs plus/minus a number of SDs.
> (100*(BBandTop(C,20,S,2)-BBandBot(C,20,S,2)))/BBandBot(C,20,S,2)
(100*(BBandTop(C,20,S,2)-BBandBot(C,20,S,2)))/BBandBot(C,20,S,2)
=(100*(Mov(C,20,S)+2*Stdev(C,20))-(Mov(C,20,S)-2*Stdev(C,20)))/(Mov(C,20,S)-2*Stdev(C,20))
=(100*Mov(C,20,S)+2*Stdev(C,20)-Mov(C,20,S)+2*Stdev(C,20))/(Mov(C,20,S)-2*Stdev(C,20))
=(100*4*Stdev(C,20))/(Mov(C,20,S)-2*Stdev(C,20))
= 400*(Stdev(C,20)/(Mov(C,20,S)-2*Stdev(C,20))
= 400*(Stdev(C,20)/(Mov(C,20,S)-2*Stdev(C,20))
remove the scaling factor by dividing by 400
= Stdev(C,20)/(Mov(C,20,S)-2*Stdev(C,20))
= Stdev(C,20)/BBandBot(C,20,S,2)
which is much simpler and easy to understand!
> (BBandTop(C,20,E,2)-BBandBot(C,20,E,2))
which also goes like:
(BBandTop(C,20,E,2)-BBandBot(C,20,E,2))
=(Mov(C,20,E) + 2*Stdev(C,20)) - (Mov(C,20,E) - 2*Stdev(C,20))
= Mov(C,20,E) + 2*Stdev(C,20) - Mov(C,20,E) + 2*Stdev(C,20))
= 4*Stdev(C,20)
but you get the same information without the scaling factor of 4...
= Stdev(C,20)
So why are you all playing around with BBandTops and BBandBots? I
think the important thing is to understand where the information and
indicators come from. People like the look of massively long and
complicated formula; I think they are too prone to error, and I am
also pretty sure that the authors either:
a. purposely make their code more complicated than it needs be to hide
the truth their indicators dont work, "If it looks complicated it must
work!" mallarky. A certain person who visits this forum has a
commercial product that contain EIGHT formulas, that when combined in
various combinations form his trading system. It doesnt matter what
the combination is, the result is always the same and can be rewritten
VERY EASILY into three short lines of code. BTW he expects you to pay
for eight formula annually!
b. have no idea about they are doing and hope people will blindly
follow them into the poor house.
Have a go at these indicators, which if I have done my maths correctly
will reproduce the original indicators exactly (with scaling), and are
a lot more easily comprehended. If you understand what is going on,
you are in a better position to FULLY EXPLOIT the situation.
Thats just my two cents!
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