InvestorQ : Can you tell me as to how as a technical trader, I can use the Percentage B (%B) oscillator for trading?
Rutuja Nigam made post

Can you tell me as to how as a technical trader, I can use the Percentage B (%B) oscillator for trading?

Answer
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Arti Chavan answered.
1 year ago


There are some basic rules that you need to follow to calibrate a trade out of the above indicator.

If the closing price is equal to the upper Bollinger Band then the, Percent B would be 100 (percent). If the closing price is above the upper Bollinger Band, Percent B would be greater than 100. If the closing price is equal to the moving average, Percent B is 50 percent. If the closing price is equal to the lower Bollinger Band, Percent B would be zero. If the closing price is below the lower band, Percent B would be negative.

During up trends watch for %B to reach oversold levels for possible buying opportunities. Similarly, during down trends watch for %B to reach the overbought levels for possible short selling opportunities or even unwinding opportunities.

The formula for calculating the %B is as under:

%B = [(Price – Lower Band) / (Upper Band – Lower Band)] * 100