Bollinger bands formula excel
How to Calculate Bollinger Bands Using Excel - Tradinformed
Signup for the Tradinformed newsletter to get notified about new articles, products and sales. Bollinger Bands are a technical indicator that are placed on charts to show when the price is at an extreme relative to recent price action.
They can be used for taking profits or helping to identify changes in the market direction. Bollinger Bands expand and contract depending on price action. The first stage in calculating Bollinger Bands is to take a moving average. Then you calculate the standard deviation of the closing price over the same number of periods.
The standard deviation is then multiplied by a factor typically 2. The upper band is calculated by adding the standard deviation multiplied by the factor to the moving average. However, I often add them to charts temporarily to see whether the current price is inside or outside the bands. This means that they can be applied to any market and timeframe without needing to adjust the parameters.
It also contains some interesting historical detail about how the bands were originally created. If you are interested in using Excel to backtest trading strategies my new Ebook course: You may also be interested in how to calculate the following indicators: Calculating the RSI Indicator Calculating the SuperTrend Indicator Optimising Trading Strategies using Excel.
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