Charts

Charts

Bollinger Bandwidth

The Bollinger Bandwidth indicator identifioes situations where the direction of an instrument's prices are about to move. Bollinger Bands form an envelope drawn a number of standard deviations above and below a moving average. Bandwidth measures the percentage difference between the upper and lower bands, giving an indication to its volatility.

Configuration Options

  • Field: Price or combination of prices to use as the base for average calculations. Possible values include:
    • Open
    • High
    • Low
    • Close
    • Adjusted Close
    • HL/2 \( \left ( \frac{High + Low}{2} \right ) \)
    • HLC/3 \( \left ( \frac{High + Low + Close}{3} \right ) \)
    • HLCC/4 \( \left ( \frac{High + Low + Close + Close}{4} \right ) \)
    • OHLC/4 \( \left ( \frac{Open + High + Low + Close}{4} \right ) \)
  • Period: Number of bars to use in the calculations.
  • Standard Deviations: Number of standard deviations above and below the average to draw the bands.
  • Moving Average Type: Type of moving average to use in the calculations:
    • Simple
    • Exponential
    • Time Series
    • Triangular
    • Variable
    • VIDYA
    • Weighted
    • Welles Winder
    • Hull
    • Double Exponential
    • Triple Exponential
  • Color Selectors: Colors to use for graph elements.
  • Display Axis Label: Whether to display the most recent value on the Y axis.

Typically, bandwidth parameters will match the user’s preferred Bollinger Band parameters.

Formula

\[Bollinger\;Bandwidth = \frac{(Upper\;Band - Lower\;Band)}{Central\;Moving\;Average} \times 100 \]