Better Bollinger Bands Using Smoothed Price and Volatility

Summary

This document presents a modified Bollinger Bands indicator attributed to Dennis McNicholl and describes a ProRealTime adaptation of a TradingView version. It calculates a smoothed center from the average of high, low, and close, then smooths the absolute deviation of price from that center. The upper and lower bands are formed by adding and subtracting a multiple of the smoothed deviation, producing three plotted series: upper band, center, and lower band.

The material gives implementation logic and identifies example settings for the lookback and band multiplier, but it does not explain how to trade band touches or breakouts. No backtest, comparative evidence, or performance results are provided, so the indicator should be treated as a calculation recipe rather than proof of a profitable strategy. The remaining text concerns site data handling and does not contribute to the trading method.

Key ideas

• The indicator uses a smoothed price series as its center line.
• It estimates dispersion by smoothing absolute deviations from that center.
• Upper and lower bands are set by adding and subtracting a scaled dispersion estimate.
• The document supplies an implementation adaptation but no trading rules or performance evaluation.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.