technical analysis tool invented by John Bollinger in the 1980s. Having evolved from the concept of trading bands, Bollinger Bands can be used to measure the highness or lowness of the price relative to previous trades.Bollinger Bands consist of:
* a middle band being a N-period simple moving average
* an upper band at K times a N-period standard deviation above the middle band
* a lower band at K times a N-period standard deviation below the middle band
Typical values for N and K are 20 and 2, respectively.
When the bands lie close together a period of low volatility in stock price is indicated. When they are far apart a period of high volatility in price is indicated. When the bands have only a slight slope and lie approximately parallel for an extended time the price of a stock will be found to oscillate up and down between the bands as though in a channel.
Price: $49.95
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