📊 TECHNICAL
Bollinger %B
Shows exactly where price sits relative to the Bollinger Bands on a 0-1 scale, turning the visual band position into a single normalized oscillator value.
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Live Demo — Bollinger %B applied to NIFTY 50 (illustrative)
PriceEMA(9)EMA(21)SMA(20)
What is Bollinger %B?
Bollinger %B was introduced by John Bollinger to express a price's position within the bands numerically instead of visually — 0 is the lower band, 1 is the upper band. Being a bounded number, it can be plotted as its own oscillator and compared across instruments.
Formula
%B = (Close - Lower Band) / (Upper Band - Lower Band)
Upper Band = SMA(N) + (K*StdDev(N))
Lower Band = SMA(N) - (K*StdDev(N))Parameters
| Parameter | Default | Description |
|---|---|---|
| Period (N) | 20 | Lookback for the underlying SMA and standard deviation |
| Std Dev Multiplier (K) | 2.0 | Width of the bands used in the %B calculation |
Signal Interpretation
- %B > 1 means price closed above the upper band (extreme strength/overbought).
- %B < 0 means price closed below the lower band (extreme weakness/oversold).
- %B = 0.5 means price is exactly at the middle band.
- Repeated pushes toward 1 with rising volume during an uptrend often signal continuation (band walking).
- A drop back through 1 or 0 can flag a short-term reversal.
Tips & Best Practices
- Don't treat >1 or <0 as automatic reversal signals in strong trends — bands can be walked for extended periods.
- Look for %B divergence against price as a higher-quality reversal clue.
- Pair with Bollinger Band Width to distinguish a genuine squeeze breakout from a routine band touch.