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%B (Bollinger 20)

%B (Bollinger 20)

%B shows where price sits between the lower and upper Bollinger bands. 0 means at the lower band, 1 at the upper band.

How it relates

(Closing PriceClosing price is the last traded price of the period. It's the most common reference price for charts and indicators.−Bollinger Lower (20)The lower Bollinger band is the mid line minus a volatility buffer. Price touching it can point to strong downside or possible exhaustion.)÷(Bollinger Upper (20)The upper Bollinger band is the mid line plus a volatility buffer. Price touching it can signal strong upside or possible overextension.−Bollinger Lower (20)The lower Bollinger band is the mid line minus a volatility buffer. Price touching it can point to strong downside or possible exhaustion.)=%B (Bollinger 20)

%B shows where price sits between the lower and upper Bollinger bands. 0 means at the lower band, 1 at the upper band.

The calculation:

%B = (Price - Lower Band) / (Upper Band - Lower Band)

Interpreting %B values:

  • %B = 1.0: Price at the upper band
  • %B = 0.5: Price at the middle band
  • %B = 0.0: Price at the lower band
  • %B > 1.0: Price above the upper band
  • %B < 0.0: Price below the lower band

Trading applications:

  • Overbought/oversold: High %B suggests overbought; low %B suggests oversold
  • Trend strength: Consistent high %B indicates strong uptrend
  • Mean reversion: Extreme %B values often precede reversals
  • Divergences: Price making new highs with lower %B can warn of weakness

Advantages of %B:

  • Normalised scale: Comparable across different stocks and time periods
  • Quantifies position: Precise measure rather than visual interpretation
  • Scanning: Easy to screen for stocks at extreme %B levels

%B complements visual Bollinger Band analysis by providing a numerical value that can be used in systematic trading strategies and screening.