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Technical Studies Reference


Bollinger Bands

This study calculates and displays Bollinger Bands for the data specified by the Input Data Input, as well as a Moving Average of the Input Data.

Let \(X\) be a random variable denoting the Input Data, and let \(X_i\) be the value of the Input Data at Index \(i\). Let the Inputs Length and Standard Deviations be denoted as \(n\) and \(v\), respectively. Then we denote the Bollinger Bands at Index \(t\) for the given Inputs as \(TB_t(X,n,v)\) (Top Band) and \(BB_t(X,n,v)\) (Bottom Band), and we compute them for \(t \geq n - 1\) in terms of a Simple Moving Average and a Standard Deviation as follows.

Top Band: \(TB_t(X,n,v) = MA_t(X,n) + v \cdot \sigma_t(X,n)\)

Bottom Band: \(BB_t(X,n,v) = MA_t(X,n) - v \cdot \sigma_t(X,n)\)

The band in the middle is the graph of \(MA_t(X,n)\).

Note: Depending on the setting of the Input Moving Average Type, the Simple Moving Average in each of the above formulas could be replaced with an Exponential Moving Average, a Linear Regression Moving Average, a Weighted Moving Average, a Wilders Moving Average, a Simple Moving Average - Skip Zeros, or a Smoothed Moving Average.

Inputs

Spreadsheet

The spreadsheet below contains the formulas for this study in Spreadsheet format. Save this Spreadsheet to the Data Files Folder.

Open it through File >> Open Spreadsheet.

Bollinger_Bands.14.scss


*Last modified Wednesday, 03rd January, 2018.