In order to accurately gauge the significance of a narrowing of the bands, a technical analyst will need to research past BBW fluctuations and price performance to increase trading accuracy. What is considered narrow for one security may even change within the scope of the same security depending on the timeframe. What is considered narrow for one security may not be for another. The significance of an instruments relative narrowness changes depending on the instrument or security in question. What needs to be understood however is that a trader cannot simply look at the BBW value and determine if the Band is truly narrow or not. This value is used to define the narrowness of the bands. Calculation Bollinger Bands Width = (Upper Band - Lower Band) / Middle Band The basicsīollinger Bands Width (BBW) uses the given calculation and outputs a Percentage Difference between the Upper Band and the Lower Band. The creator of Bollinger Bands, John Bollinger, introduced Bollinger Bands Width in 2010 almost 3 decades after the introduction of his Bollinger Bands. BBW can be used to identify trading signals in some instances.

Bollinger Bands Width serve as a way to quantitatively measure the width between the Upper and Lower Bands. The Upper and Lower Bands are typically 2 standard deviations above and below the SMA (Middle Line). The Middle Line is typically a 20 Day Simple Moving Average. Bollinger Bands are a volatility indicator which creates a band of three lines which are plotted in relation to a security's price. Bollinger Bands Width (BBW) is a technical analysis indicator derived from the standard Bollinger Bands indicator.

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