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Gold/Mining/Energy : Gold Price Monitor

GDXJ 107.29

-0.9%

Dec 2 4:00 PM EST

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To: stuffbug who wrote (115934)	1/13/2024 7:45:09 PM
From: Sun Tzu	of 116791

Stocks are not normally distributed. They have a log-normal distribution. This is why Bollinger bands don't behave as you'd expect. The standard deviation does not work properly for non-Gaussian distributions. What I have done in my version of BB, is to separate the standard distributions for up days and down days and apply it separately to the upper and lower bands. This fixes some of the problems. Ultimately, it's not about what the chart shows you; it's about how you interpret it. So long as you know the quirks, you can use whatever indicator that you like. I prefer Keltner Bands for the short term and my own version of Bollinger bands for long term charts (think 200 week duration)

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