Contents x
    Bollinger Bands (BB)
      • Dark
        Light
      Contents

      Bollinger Bands (BB)

        • Dark
          Light
        Article summary

        DXcharts powers DXtrade, DXfina, and FinCharts.
        Check our website to find more information about DXcharts library.

        Bollinger Bands (BB) is a technical analysis tool that helps monitor price volatility. BB plots a Simple Moving Average (SMA) and two standard deviations above and below the SMA as overbought and oversold levels. The greater the price deviation from the moving average, the higher the volatility.

        MidLine = SMAn (TP)
        LowerBand = MidLine - (σTPn x m)
        UpperBand = MidLine + (σTPn x m)

        where:
        SMA – Simple Moving Average for the period
        TP – Typical Price
        σTPn – Standard Deviation over last n periods of TP
        m – the multiplier
        n – the number of periods

        Bollinger BandsBollinger Bands

        INPUTS

        InputDescription
        LengthThe number of periods the indicator uses to calculate the MidLine
        DisplaceThe number of bars the indicator to be shifted to
        NumDevDownThe standard deviation value (in points) to plot the LowerBand
        NumDevUpThe standard deviation value (in points) to plot the UpperBand
        Price
        The following data sources are available for calculation of MidLine:
        • Open. The Open Price of every bar for the specified period.
        • High. The High Price of every bar for the specified period. 
        • Low. The Low Price of every bar for the specified period.
        • Close. The Close Price of every bar for the specified period. 
        • Median. The Median Price of every bar for the specified period - (High + Low) / 2.
        • Typical. The sum of High, Low, and Close prices divided by 3 for the specified period- (High + Low + Close) / 3.
        • OHLC average. The arithmetical mean of High, Low, Open, and Close prices for the specified period - (Open + High + Low + Close) / 4.
        • Volume. The Close Price of every bar + average volume of an asset for the specified period.
        Average
        The following Moving Average types are available for calculations:
        • Simple. Simple Moving Average (SMA) is applied to MidLine.
        • Wilders. Wilders Smoothing is applied to MidLine.
        • Weighted. Weighted Moving Average (WMA) is applied to MidLine.
        • Exponential. Exponential Moving Average (EMA) is applied to MidLine.

        PLOTS

        The plot renders the data you are working with on the chart. You can show/hide a plot by clicking the corresponding item in the settings. Every plot has a set of basic settings that you can change: color, weight, and type.

        PlotDescription
        LowerBandThe lower deviation from the MidLine
        MidLineThe middle line
        UpperBandThe upper deviation from the MidLine
        Color

        Click the color rectangle under the plot's name to open the palette. Use the slider at the bottom to set the opacity of the color.

        Palette

        To create a custom color:

        1. Clickto open the color picker
        2. By using the slider at the bottom, adjust the main color
        3. Then, set a shade for the main color on the palette

        The custom-created colors are added to your palette. To remove a custom color, drag it out of the palette.

        Weight
        Change the value (in px) to adjust the thickness of the plot.
        Type
        The following plot types are available:
        • Linear. The plot is displayed as a line.
        • Column. The plot is displayed as a histogram.
        • Difference. The plot is displayed as a line which represents the difference between High and Low prices of the bar.
        • Points. The plot is displayed as points.
        • Text above candle. The plot is displayed as the price labels above candles on the chart.
        • Text below candle. The plot is displayed as the price labels below candles on the chart.
        • Triangle above candle. The plot is displayed as triangles above candles on the chart.
        • Color candle. The candles on candle-type charts are highlighted with specified colors.

        OVERLAYING

        Check Overlaying to display the indicator on the chart. Otherwise, the indicator is shown in a study pane down below.

        Note: To reset the settings, click Restore to Default next to the SETTINGS: INDICATOR'S TITLE
        What's Next