How to Calculate Bollinger Bands Using Excel – Video

A band plotted two standard deviations away from a simple moving average is Bollinger Band. The price of the stock is banded by an upper and lower band along with a day simple moving average. Bollinger Bands are a volatility indicator for the Stock prices.

Learn how your comment data is processed. Download the free Bollinger Bands template here: I am continually working on developing new trading strategies and improving my existing strategies.

Table Of Content

Bollinger Bands are one of the most popular indicators being used by quantitative traders today. While almost any trading software will be able to calculate the Bollinger Band values for you, it never hurts to know how to get under the hood and do it yourself.

Hi Jaggu, Can this be applied to the commodities directly? I am mainly interested in precious metals. Can Bollinger bands, pivot point calculations be applied to the commodities directly?

Thanks for your effort.. Will you please tell me why do we need to multiply by number 2 and sqaure root for upper and lower band Can you tell us which stock you used as an example in the excel image you provided nin your example?

E22 means 21 points in time.. Sunday, November 25, Bollinger Bands. Bollinger Bands are a technical trading tool created by John Bollinger in the early s. The purpose of Bollinger Bands is to provide a relative definition of high and low. Bollinger Bands consist of a set of three curves drawn in relation to securities prices. The middle band is a measure of the intermediate-term trend, usually a simple moving average, that serves as the base for the upper and lower bands.

The interval between the upper and lower bands and the middle band is determined by volatility,typically the standard deviation of the same data that are used for the average. They exit when price touches the moving average in the center of the bands. Other than Finance Experts, The International Civil Aviation Organization is also using Bollinger bands as a safety indicator to measure efficiency of safety by determining the accident rate. In this example we are taking sample data from January to March.

The four values recorded are Open, High, Low and Close. Bollinger Bands consist of a middle band with two outer bands. The middle band is a simple moving average that is usually set at 20 day moving average Purple Color. The outer bands are usually set 2 standard deviations above and below the middle band. The upper Bollinger band is indicated in Green color.

The lower Bollinger band is indicated in Red color. The close price is indicated with Blue in color. As shown in the image below. Select the required Standard deviation multiplier from the dropdown provided in the Excel file free download link at the end of the blog. Based on the standard deviation and the multiplier, the Lower Bollinger and Upper Bollinger values gets updated.

We can decide whether to buy or sell based on the graph. These are considered as sell periods. Selling at those periods will turn out to be profitable. This period is considered as Buy period as the price is low and is apt time to invest.