What is bollinger

Corning Gorilla Glass TougherTogether. ET India Inc. ET Engage. ET Secure IT. Suggest a new Definition Proposed definitions will be considered for inclusion in the Economictimes. Blue Chip Stocks Definition: Blue chip stocks are shares of very large and well-recognised companies with a long history of sound financial performance. These stocks are known to have capabilities to endure tough market conditions and give high returns in good market conditions. Blue chip stocks generally cost high, as they have good reputation and are often market leaders in their respective industries.

Since then the term has been used to refer to highly-priced stocks, but now it is used more commonly to refer to high-quality stocks.

These are stocks that generally deliver superior returns in the long run. Some people also relate blue chip stocks to blue betting disks in the game of poker, where the blue disk has the highest value while the white one has the lowest. Several parameters can be considered to identify blue chip companies. They include consistent annual revenue over a long period, stable debt-to-equity ratio, average return on equity RoE and interest coverage ratio besides market capitalisation and price-to-earnings ratio PE.

Bonus Share Bonus shares are additional shares given to the shareholders without any additional cost, based upon the number of shares that a shareholder owns. Definition: Bollinger Bands is one of the popular technical analysis tools, where three different lines are drawn, with one below and one above the security price line. These lines show a band or a volatility range in which a particular security price is moving up or down. Bollinger Bands was developed by John Bollinger in the mid s and he trademarked this term in Initially, it was called trading bands, but later on, John Bollinger evolved this concept and called it Bollinger Bands.

The Market Timing Report is a collection of charts John Bollinger uses to forecast stock market movements. It is updated weekly and is available to all BollingerBands. Commentary for the charts is provided with a Bollinger Bands Letter subscription.

Guidelines for the Market Timing Chart Pack can be read here. What Are Bollinger Bands? Bollnger Band Videos, Articles, Interviews. Bollinger Bands Rules. Use the pair to confirm signals given with other indicators. First, calculate a simple moving average. Next, calculate the standard deviation over the same number of periods as the simple moving average. For the upper band, add the standard deviation to the moving average.

For the lower band, subtract the standard deviation from the moving average. Short term: 10 day moving average, bands at 1. The Bollinger Band Width is the difference between the upper and the lower Bollinger Bands divided by the middle band. Technical analysis focuses on market action — specifically, volume and price.

Technical analysis is only one approach to analyzing stocks. Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors. Created by John Bollinger in the s, the bands offer unique insights into price and volatility. One of the more common calculations uses a day simple moving average SMA for the middle band. The upper band is calculated by taking the middle band and adding twice the daily standard deviation to that amount.

The lower band is calculated by taking the middle band minus two times the daily standard deviation. On the other hand, when price breaks above the upper band, the market is perhaps overbought and due for a pullback.

Mean reversion assumes that, if the price deviates substantially from the mean or average, it eventually reverts back to the mean price. In range-bound markets, mean reversion strategies can work well, as prices travel between the two bands like a bouncing ball. During a strong trend, for example, the trader runs the risk of placing trades on the wrong side of the move because the indicator can flash overbought or oversold signals too soon.

To help remedy this, a trader can look at the overall direction of price and then only take trade signals that align the trader with the trend. For example, if the trend is down, only take short positions when the upper band is tagged. The lower band can still be used as an exit if desired, but a new long position is not opened since that would mean going against the trend.

As John Bollinger acknowledged, "tags of the bands are just that, tags, not signals. Price often can and does "walk the band. Therefore, the bands naturally widen and narrow in sync with price action , creating a very accurate trending envelope. Returning to the chart above, we can see how trend traders would position long once price entered the "buy zone. The reason for the second condition is to prevent the trend trader from being "wiggled out" of a trend by a quick move to the downside that snaps back to the "buy zone" at the end of the trading period.

Note how, in the following chart, the trader is able to stay with the move for most of the uptrend , exiting only when price starts to consolidate at the top of the new range.