Trends/Volatility and bands

Bollinger %B

A number showing where the close sits inside the Bollinger bands: 0 is the lower band and 1 is the upper band.

Volatility and bandsBest on 3M, 6M, 1YAlso called percent B

Illustration of the Bollinger %B shape. It is a sketch, not real price data.

What it shows

%B turns price's position inside the bands into a number. The formula is (close − lower band) ÷ (upper band − lower band). A value of 0.5 is on the middle line, 1 is on the upper band and 0 is on the lower band.

Values above 1 or below 0 mean price is outside the bands.

How we find it

The same code that draws it on your chart follows these steps, with the same result every time.

Compute the Bollinger bands (20, 2).
For each bar, %B = (close − lower) ÷ (upper − lower).
Plot it under the price.
Mark 0, 0.5 and 1 on the panel.

Starting values: Length 20; Width 2 standard deviations. These are proposed and will be tuned on real price data before launch.

How to read it

The panel shows %B over time.
Above 1 means price closed above the upper band.
Below 0 means price closed below the lower band.

Status labels you may see

Label	What it means
Upper part	%B above 0.8.
Middle	%B between 0.2 and 0.8.
Lower part	%B below 0.2.

What cancels it

Nothing cancels it.

What traders check next

How long %B stayed near an extreme.
Whether %B made higher highs when price did.
The width of the bands.

Limits

It depends on the bands, so it inherits their limits.
High values are common in strong trends.
It does not say what happens next.

Try it in forecastviz

Open any ticker and choose Volatility and bands → Bollinger %B in the left menu.
Switch between 3M, 6M, 1Y to see how the picture changes.
Compare with Bollinger bands and Bollinger bandwidth on the same chart.

Open on a ticker

Questions

What does %B = 0.5 mean?

The close is on the middle line.

Can it be above 1?

Yes, when the close is above the upper band.