Interpreting Bollinger Bands Percent B Levels
Summary
This short indicator description explains Bollinger Bands %B as a measure of where price sits relative to the upper band, middle line, and lower band. Values above one indicate price is beyond the upper band, while one marks the upper band itself. Values above or below 0.50 place price on either side of the middle line; zero marks the lower band, and readings below zero indicate price has moved beneath it.
The description also identifies 0.80 and 0.20 as levels associated with price nearing the upper and lower bands. It defines how to interpret the indicator but does not provide a trading rule, explain the underlying calculation, or present performance evidence. Band contact or proximity alone therefore should not be read as a recommendation to enter or exit a position.
Key ideas
- %B relates price to the upper, middle, and lower Bollinger Bands.
- A reading of one corresponds to the upper band, while a reading of zero corresponds to the lower band.
- Values above or below 0.50 indicate whether price is above or below the middle line.
- Readings beyond one or below zero show price outside the band range.
- The description associates levels near 0.80 and 0.20 with approaching the upper and lower bands.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.