Does anybody out there have a formula to signal when the Bollinger bands are relatively wide, compared to the band's average width in a stock's history? Here are my rather lame efforts (which have led to rather lame hands from lots of typing and tinkering):
(mov((fml("Bollinger Band Upper")-fml("Bollinger Band Lower")),89,s)-.5)>(mov((fml("Bollinger Band Upper")-fml("Bollinger Band Lower")),200,s))
Or this one:
((fml("Bollinger Band Upper"))-(fml("Bollinger Band Lower"))>3.8)
Or this one:
mov((fml("Bollinger Band Upper")-fml("Bollinger Band Lower")),220,s)>(mov((fml("Bollinger Band Upper")-fml("Bollinger Band Lower")),520,s))
These are the formulas for Bollinger Band Upper and Bollinger Band Lower:
Bollinger Band Lower: (mov(Close,20,S)-std(Close,20,2))
Bollinger Band Upper: (mov(Close,20,S)+std(Close,20,2))
The formulas for the width of the bands can be used with any Bollinger band trading system, to avoid sell signals when the bands are tight and price is moving up and down through them (as they did in AMTX before the breakout).
The middle formula doesn't work with penny stocks, of course, because 3.8 is too high a value most of the time.
The first formula cheats, because I took .5 off the 89-day moving average so it was above the 200-day average more often. "Brother, can you spare a nickel?" might be the name of this formula.
The last formula works surprisingly well for most stocks, but I think there must be a better one out there, a nice simple one that does Occam proud.
There are some formulas floating about out there that indicate when the price is close to the bands ((C+1.9*Std(C,20)-Mov(C,20,S))/(3.8*Std(C,20)))*100 , but I'm not looking for one of these right now. I just need one that signals when the bands are relatively wide.
Come on now, cough 'em up. I know you all have one. How could a self-respecting technical analyst get by without one? |
