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technical_indicators:bollinger_band_perce [2019/06/24 19:39] 127.0.0.1 external edit |
technical_indicators:bollinger_band_perce [2023/09/15 22:06] (current) jayanthi [What’s the relationship between %B and the Money Flow Index (MFI)?] |
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| - | ===== Introduction ===== | + | ===== What Is the %B Indicator? ===== |
| - | %B quantifies a security's price relative to the upper and lower Bollinger Band. There are six basic relationship levels: | + | The %B Indicator measures a security's price in relation to the upper and lower Bollinger Bands. You can use it to identify overbought or oversold conditions and gauge trend strength. If you use it with other indicators, like the Money Flow Index (MFI), it can help you spot entry points within a given trend. Overall, the %B is a versatile tool that can help enhance your ability to analyze and respond to markets. |
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| + | There are six basic relationship levels: | ||
| * %B is below 0 when price is below the lower band | * %B is below 0 when price is below the lower band | ||
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| * %B is above 1 when price is above the upper band | * %B is above 1 when price is above the upper band | ||
| - | ===== Calculation ===== | + | ===== How Do You Calculate the %B Indicator? ===== |
| <code> | <code> | ||
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| {{:technical_indicators:bollinger_band_perce:bbpb-3-fdxmfi.png|Chart 3}} | {{:technical_indicators:bollinger_band_perce:bbpb-3-fdxmfi.png|Chart 3}} | ||
| - | ===== Conclusion ===== | + | ===== The Bottom Line ===== |
| %B quantifies the relationship between price and Bollinger Bands. Readings above .80 indicate that price is near the upper band. Readings below .20 indicate that price is near the lower band. Surges towards the upper band show strength, but can sometimes be interpreted as overbought. Plunges to the lower band show weakness, but can sometimes be interpreted as oversold. A lot depends on the underlying trend and other indicators. While %B can have some value on its own, it is best when used in conjunction with other indicators or price analysis. | %B quantifies the relationship between price and Bollinger Bands. Readings above .80 indicate that price is near the upper band. Readings below .20 indicate that price is near the lower band. Surges towards the upper band show strength, but can sometimes be interpreted as overbought. Plunges to the lower band show weakness, but can sometimes be interpreted as oversold. A lot depends on the underlying trend and other indicators. While %B can have some value on its own, it is best when used in conjunction with other indicators or price analysis. | ||
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| - | For more details on the syntax to use for %B scans, please see our [[docs>scans:indicators#bollinger_s_b_indicator|Scanning Indicator Reference]] in the Support Center. | + | For more details on the syntax to use for %B scans, please see our [[https://support.stockcharts.com/doku.php?id=scans:indicators#bollinger_s_b_indicator|Scanning Indicator Reference]] in the Support Center. |
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| + | ===== %B FAQs ===== | ||
| + | ==== What is %B in relation to Bollinger Bands? ==== | ||
| + | %B quantifies a security's price in relation to the upper and lower Bollinger Bands. | ||
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| + | ==== How can you determine if a stock is genuinely overbought or oversold using %B? ==== | ||
| + | It's essential to identify the larger trend first. In a bigger uptrend, %B is considered oversold when it moves to zero or below. In a strong downtrend, %B can be considered overbought when it approaches or exceeds 1. | ||
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| + | ==== How can I use the %B for trend identification? ==== | ||
| + | An uptrend is identified when %B is above 0.80 and MFI(10) is above 80. Conversely, downtrends are spotted when %B is below 0.20 and MFI(10) is below 20. | ||
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| + | ==== What’s the relationship between %B and the Money Flow Index (MFI)? ==== | ||
| + | John Bollinger proposed a trend-following system using %B in conjunction with the Money Flow Index. The two indicators combined can help identify significant trend directions. | ||
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| + | ==== Are there any limitations to solely relying on %B? ==== | ||
| + | While %B can indicate when a stock is near its bands, it doesn't always mean a stock is overbought or oversold. It is best used in combination with other indicators or price analysis. | ||