Description

Bollinger Bands consist of three lines - a Simple Moving Average line with two standard deviation lines on either side of SMA line.


Formula

midLineArray[] = SMA(close)
upperBandArray[] = SMA(close)+stdDev*SQRT(closeDev/period)
lowerBandArray[] = SMA(close)-stdDev*SQRT(closeDev/period) where
closeDev = SUM{n=0;n<period}(POW(close[n]-SMA(close)[n],2))


Interpretation

Prices moving close to the upper standard deviation line may indicate overbought condition, when prices reach close to the lower band oversold condition may be indicated.

inteliCharts - Bollinger Bands
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