How to Create Bollinger Bands

Bollinger Bands are used to determine how strongly an asset is rising and when it is potentially reversing or losing strength. They show a middle line, an upper band, and a lower band. They use a running total where as a regular reference band is a stagnant line.

In my last blog post I showed you some of the best visualizations for showing anomalies here. You can also use Bollinger Bands to display anomalies.

I have created the below chart using the Superstore data set and with the methods in this youtube video by Alexandru Stancescu from BTProvider.

Example: Bollinger Band

Example: Distribution Band with the Standard Deviation labels and an Average Reference line.

The step by step instructions are located in the BT Provider site here.

This chart is also found in my World of Charts Dashboard for download here.

It is located on the distribution dashboard.

Popular Use Cases for Bollinger Bands: They are typically used in Trading.

Advantages: They can identify short price movements

Disadvantages: They are calculated using a Moving Average. They also shouldn't be used as a standalone tool.

Andy Kriebel creates Confidence Bands which look similar to Bollinger Bands. They are similar in development because they use ranges of upper and lower values. Watch his video here in his VizWiz site! It is pretty straight forward how to create this visualization.

Here is his example from the VizWiz site;