Knowledge center · Technical analysis
Bollinger Bands (20, 2σ)
A ±2 standard-deviation envelope around the 20-day average; %B says where price sits inside it.
Formula
%B = (price − lower band) / (upper − lower); bandwidth = (upper − lower) / price.
Interpretation
%B near 1 means price is pressing the statistical ceiling of its recent range; near 0, the floor. Narrow bandwidth (a “squeeze”) marks unusually quiet markets that often precede expansion.
What good looks like
%B near 0 in an uptrend (pullback to statistical support); a squeeze resolving upward.
What bad looks like
%B pinned near 1 with fading volume — extension without sponsorship.
Typical range
%B mostly 0–1; excursions beyond happen in strong moves.
Limitations
Bands widen after volatility arrives — like all volatility tools, they describe, they don’t predict.
How OmniSignal uses it
It normalizes “is this move stretched?” against the stock’s own recent volatility instead of a fixed rule.
Where it enters the score
Not a scoring input — presentation context for the range position.
References
Bollinger (2001), Bollinger on Bollinger Bands
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