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  1. #1
    Master Member Bogdan G's Avatar

    Bollinger... John Bollinger. The James Bond of Volatility !!!

    "This smart guy needed some way of measuring volatility in the financial markets. Yes, volatility, a very important thing, as we all know because identifying times of high volatility or low volatility can help us a lot in determining the right strategy we need to use. In the early 1980’s John Bollinger found the answer to his quest; and it came in the form of two bands and a Simple Moving Average (usually a 20 period MA) which he simply called Bollinger Bands."

    If you want to understand more about this great tool, read the entire article:

  2. #2
    Legendry Member Michael Hodges's Avatar
    Did Bollinger actually invent his bands or just name them/the strategy. doesn't he use standard deviation bands and apply them to his charts?

  3. #3
    Master Member Bogdan G's Avatar
    Umm.. John Bollinger invented Bollinger Bands

    "John Bollinger is the president and founder of Bollinger Capital Management. He personally governs all investment decisions for Bollinger Capital Management clients.

    John Bollinger is a Chartered Financial Analyst (CFA) and a Chartered Market Technician (CMT). He is known to the public for his many years of market analysis and commentary on television -- first on Financial News Network, where he was the Chief Market Analyst -- and subsequently on CNBC.

    John Bollinger is also well known to professional investors. An avid researcher, he has developed a number of widely used investment tools and analytical techniques. His Bollinger Bands® and related tools have been integrated into most of the analytical software and charting platforms currently in use. "

  4. #4
    Legendry Member Michael Hodges's Avatar
    I know he invented Bollinger Band analysis, my question was more on the difference between standard deviation bands (which is what I believe BBands are or are based on) and actual Bollinger Bands.

  5. #5
    Veteran Member hchandra's Avatar
    I think Looking at the formula to create bollinger band will help answering the question

    * Middle Band = 20-day simple moving average (SMA)
    * Upper Band = 20-day SMA + (20-day standard deviation of price x 2)
    * Lower Band = 20-day SMA - (20-day standard deviation of price x 2)

    Basically its a standard deviation of price, and people at that time never though to trade using standard deviation?]
    haven't read the links, but maybe the bollinger band analysis more of how to take the trade using standard deviation defined.

  6. #6
    Legendry Member Michael Hodges's Avatar
    Sweet, I was fishing for an answer like that. It does include standard deviation without being a standard deviation band, incorporating moving averages to smooth out the data and provide signals.

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