BollingerBands(Series,Double,Int32) Method

Within this class we offer procedures which evaluate the upper and lower Bollinger Bands.

[Visual Basic]
Overloads Public Shared Function BollingerBands( _
   ByVal s As Series, _
   ByVal standardDeviationLevel As Double, _
   ByVal lengthOfMA As Integer _
) As SeriesCollection

[C#]
public static SeriesCollection BollingerBands( 
   Series s,
   double standardDeviationLevel,
   int lengthOfMA
);

Parameters

s

A statistical series.

standardDeviationLevel

The (positive) number of standard deviations which the lower band in shifted from the moving average.

lengthOfMA

The length of the moving average used within the evaluation of the Bollinger Bands. Note that this also corresponds to the length of the period over which the standard deviation is evaluated.

Remarks

Further Details

Bollinger Bands are a type of envelope that are plotted at standard deviation levels above and below the corresponding (simple) moving average. This produces an effect of having the bands widen during periods of higher volatility and contract during less volatile periods. Bollinger Bands indicate the relative supply and demand for a given asset. If the asset to move close to the top of the envelope then it indicates that there is strong demand for the asset, conversely if the asset hugs the bottom of the trading range then it indicates that there is oversupply of the asset.

Since the Bollinger Bands will nearly always be combined with other indicators when forming a trading system the number of periods used in the evaluation of the standard deviation of the stocks and the moving average will vary. For those without design restrictions a popular choice of the number of time periods is around 20-23.

See Also

StatisticalEngine Class  | StatisticalEngine Members  | Overload List

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