Description

• BBW is simply the difference between the upper and lower Bollinger bands
• This indicator gives a graphical movement of volatility

Interpretation

• High Band Width value indicates a higher volatility and also a possibility of a reversal
• Low Band Width value indicates a lower volatility and also a possibility of a breakout

Default Parameters Used/Inputs

• Close line
• Standard Deviation Bars- number of bars for calculating Standard Deviation
• Standard Deviation Factor- a whole number by which the deviation lines should be plotted

Returns/Output

Bollinger bands’ bandwidth graph line showing trend in volatility

Formula

BBW = Upper Band – Lower Band
Where,
Upper Band = Moving Average + factor*Standard Deviation (SD)
Lower Band = Moving Average - factor*Standard Deviation (SD)
Factor – It is the absolute number.
E.g. 1,2,3 etc