| Characteristic: |
Volatility & trend indicator |
| Parameter Defaults: |
MA Period |
20 |
controls the measurement period for the average |
| |
Std Deviation |
2 |
controls the placement of the bands around the average |
| Plots: |
BLG BandWidth |
The
Bollinger Band Width indicator is a reflection of the fact that
Bollinger Bands tend to widen during sharp price adjustments, seen
particularly in trends, while during consolidation they tend to move
closer together. This is converted into a line that represents such
action.
Bollinger Band Width = (Upper Band - Lower Band)/Middle Band
The
effect of trending price or consolidating price on the indicator is to
force values higher as a trend develops and lower again as price begins
to consolidate or move in a choppy action. Note also the ability to use
effective trend lines on the indicator to try and identify when a
consolidating market is breaking into a trending nature.
Legal disclaimer and risk disclosure
Pro Commentary, FX-Strategy, FX-Strategy Pro Charts, and any related products or services, are analytical tools only and are not intended to replace individual research. The information provided here should not be relied on as a substitute for extensive independent research before making your trading/investment decisions. FX-Strategy is merely providing this service for your general information. No representation is being made that any software or training will guarantee profits or not result in losses from trading. The views are not necessarily those of FX-Strategy, its owners, officers, agents or employees. In addition any projections or views of the market provided may not prove to be accurate. FX-Strategy will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained in this service. Be sure to closely read and understand the risks of foreign currency trading as described on the FX-Strategy website.
