I have no idea as to what the considerations are when setting the parameter for the "number of days." To put it another way, When setting the indicator what should I consider when setting it as:
"Draw Bollinger Bands(20,2.5)" ...or... "Draw Bollinger Bands(30,2.5)"
The 1st, 2nd, and 4th link tell you everything you need to know about BBands. They bascially answer your question in detail. The 3rd link warns the dangers of unregulated capitalism. Very educational.
BlackBars: Thank you. I've now watched all 4 videos and not one said anything about how to choose a time period.(the number of days). One author used a constant 21 days with no explanation why. Thanks again.
If anyone else has an insight into this question, I'd appreciate hearing it.
Steve
four 5,087 posts msg #143257 - Ignore four modified
Steve, John Bollinger suggested the following periods: 10 for short term(ST); 20 for medium term(MT); and 50 for long term(LT). He did not define ST, MT and LT. I am guessing that ST is for swing trading, MT is for position trading and LT is for trading from 6 months to 2 years. Good luck Ron
According to the book 'Bollinger on Bollinger Bands':
"The defaults for Bollinger Bands are a 20-day calculation-approximately the number of trading days in a month- and +or- 2 standard deviations. ... With a sample size of 30 or greater, +or- 2 standard deviations should contain about 95% of the data. ....to summarize the findings:At 20 periods and 2 standard deviations you get containment between 88 abd 89 percent in most markets."
I find that reading the books/articles written by those who developed technical analysis indicators usually provides lots of additional insight into their rationale and development process and what their recommended useage rules are.
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