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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: dazzled who wrote (8092)	8/5/1998 10:33:00 AM
From: Douglas Webb	Read Replies (1) \| Respond to of 14162

isn't Bill's approach similar to using BB's but he has a 140 day period and not using RSI? what is the regression line used for, just to draw the parallel lines at top and bottom? Bollinger bands are a little more complicated than that.... Here's how they're calculated: first, a simple moving average is calculated, usually using a 20 day period. That's your center line. Then, the difference between each day's price and the SMA for that day is used to calculate the standard deviation of the stock prices over that same period. The bands are plotted two standard deviations above and below the SMA line. This causes the distance between the bands to get wider when the stock price fluctuates a lot, and narrower when the stock price is fairly steady. Both the period and number of std. dev. can be adjusted to fit the price data. Doug.