Bollinger Bands Trading System
The Bollinger Bands Trading System is a volatility trading system which requires the calculation of volatility (in terms of the standard deviation). The volatility band gets plotted above and below the current market price of the stock.
The upper band (BBT) is the +2 standard deviation above the prices and the lower band (BBB) is the -2 standard deviation.
A buy is suggested when the current market price touches BBT and a sell is suggested when the current market price touches BBB.
Additional notesBBB and BBT are predefined functions in the Tradescript.
20 refers to the 20 day period and 2 refers to the number of deviations. These are the standard parameters of a Bollinger band system.