Bollinger Bands %B (BBB)

Bollinger Bands %B is a technical oscillator that quantifies how close the market price is to the upper or lower Bollinger Bands. By converting this distance into a percentage value from 0 to 1, it offers a quick way to gauge whether the market is approaching overbought (near 1) or oversold (near 0) conditions.

Key Parameters

• Period
  • Usually set to 20 in classic Bollinger Band settings.
  • Defines how many bars/candles are used to calculate both the moving average and the standard deviation. Lower periods respond more quickly to price shifts, while higher periods produce smoother signals.
• Deviation
  • Commonly set to 2.
  • Determines how far above and below the moving average the bands are plotted. Larger deviations create wider bands to capture more market volatility.
• Input
  • Most often the closing price, but can be any data series (e.g., High, Low, or a custom series).
  • Impacts the measurement by defining the price point from which Bollinger Bands are calculated.

Usage in Practice

• Overbought/Oversold Indication
  When %B is near 1, price is close to the upper band, which may suggest overbought conditions. Near 0 indicates price is close to the lower band, potentially signaling oversold conditions.
• Trend Analysis
  A strong uptrend often keeps %B hovering near the upper band, whereas a strong downtrend tends to keep it near the lower band.
• Strategy Integration with Divergence
  In StrategyQuant, Bollinger Bands %B can be combined with new Divergence Comparison Blocks to detect divergence between price action and the %B oscillator. This approach may provide earlier or more reliable signals regarding potential trend reversals.

By understanding these parameters and how to read the %B values, traders can adapt the Bollinger Bands %B oscillator to suit different trading styles and market conditions.

Indicator is implemented for: MT4/MT5/Tradestation/ Multicharts.

You can easily do your conditions in Custom blocks. More information you can find here:

• https://strategyquant.com/doc/strategyquant/custom-blocks/
• https://strategyquant.com/doc-category/strategy-templates-custom-blocks/
• https://www.youtube.com/watch?v=CGkn5kh_etc

In this module, you can also modify the custom blocks – change the periods, change the steps, etc.

How to import custom indicators to SQX:

• https://strategyquant.com/doc/programming-for-sq/import-export-custom-indicators-and-other-snippets/