Bollinger %b is an extended and helpful indicator while using the Bollinger band indicator.
If you don’t know how Bollinger band indicator work then please click on this link to learn Bollinger band indicator.
In a simple word, Bollinger’s percentage B indicates the Bollinger band’s price movement with percentage. Whenever share price trading above the Bollinger band then this indicator show above 100 lines, similarly, when stock price trading below Bollinger band in that time this indicator shows you in ‘0’ line.
This indicator tells you the position of the stock price in the Bollinger band by the number of %.
Bollinger %B indicator setting
For different trading software, it’s a little bit different to set up Still, Go to the indicator search section, and search for “Bollinger %B”.
Settings
- Field: This is a certain time price that will need to calculate this indicator line. Means you can choose an opening, closing, high, lows, etc, etc time price to calculate this indicator.
- Period: Bollinger band indicator by default also use 20 periods to calculate. Similarly, Bollinger %B is using a 20-period price for calculation.
- standard deviations: this is the standard deviations. It will deviate 2.
- Moving average type: this is to choose the moving average. like, simple moving average, exponential moving average, etc. By default simple moving average is good.
- %B: this is the Bollinger %B indicator line color.
- Show zones: If you check this. Then this will show oversold and overbought zone by shadow color.
- Overbought: this is the Overbought zone shadow color.
- Oversold: this is the Oversold zone shadow color.
Bollinger %B trading strategy
- If This indicator is above 100 lines which means share price is on the Overbought zone. And then the share price can fall.
- If this indicator is below ‘0’ line which means the price is on the oversold zone. Share prices can rise.
- When This indicator rising and after crossing 50 lanes of this indicator. This is the buying signal that share price can go upward.
- When this indicator falling and after crossing 50 lines. This the selling single share price can fall more.
Conclusion
Bollinger %B is the indicator is helpful to use with the Bollinger band indicator.
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