There are some basic rules that you need to follow to calibrate a trade out of the above indicator.

If the closing price is equal to the upper Bollinger Band then the, Percent B would be 100 (percent). If the closing price is above the upper Bollinger Band, Percent B would be greater than 100. If the closing price is equal to the moving average, Percent B is 50 percent. If the closing price is equal to the lower Bollinger Band, Percent B would be zero. If the closing price is below the lower band, Percent B would be negative.

During up trends watch for %B to reach oversold levels for possible buying opportunities. Similarly, during down trends watch for %B to reach the overbought levels for possible short selling opportunities or even unwinding opportunities.

Arti Chavananswered.There are some basic rules that you need to follow to calibrate a trade out of the above indicator.

If the closing price is equal to the upper Bollinger Band then the, Percent B would be 100 (percent). If the closing price is above the upper Bollinger Band, Percent B would be greater than 100. If the closing price is equal to the moving average, Percent B is 50 percent. If the closing price is equal to the lower Bollinger Band, Percent B would be zero. If the closing price is below the lower band, Percent B would be negative.

During up trends watch for %B to reach oversold levels for possible buying opportunities. Similarly, during down trends watch for %B to reach the overbought levels for possible short selling opportunities or even unwinding opportunities.

The formula for calculating the %B is as under:

%B = [(Price – Lower Band) / (Upper Band – Lower Band)] * 100