BollingerBandWidth
How wide the Bollinger bands are relative to their middle line: low means a squeeze, high means scattered, fast moves.
It takes the Bollinger bands on closes, 20 bars and a 2.0 multiplier by default, and measures their full spread: upper band minus lower band, divided by the middle line. The result is a ratio, not a price, so 0.00085 means the full span is 0.085 percent of the middle line. The spread comes from the sample standard deviation of recent closes, so it rises when closes scatter and falls when they bunch up, and it barely follows the price level.
How to read it
- The line sits in its own pane below the price, not on the candles, and shares the chart's time axis.
- At default settings it is a small positive fraction: the median on the sampled SPY month was 0.00085, about 65 cents of band span on a stock near 765.
- Readings under about 0.00025 (bottom 5 percent) mark a squeeze, when the bands have pinched together. Readings over about 0.0027 (top 5 percent) mark wide, scattered bars.
- Judge a reading against the recent range on the chart, not the fixed zone values alone, because those cut-offs come from one month of SPY.
- The first 19 bars at default settings are blank while the window fills.
What it outputs
- Band width
- Full spread of the Bollinger bands, upper minus lower, divided by the middle band. A ratio, so 0.001 is a tenth of a percent of the middle line.
Settings
- window
- How many closes the spread is measured over, 20 by default. Shorter (5 to 10) makes the width jump on every bar and reach its extremes often. Longer (60 or more) makes it slow, changing only when volatility has stayed different for a while.
- mult
- Scales the width in direct proportion: doubling it doubles every reading. The zones and lines are fixed for the default 2.0, so they drift off their percentiles elsewhere. Below zero the bands cross and the width turns negative, which has no meaning.
Pitfalls
- It measures how wide the bands are, not which way price will break. A squeeze is often read as a build-up before a move, but the value does not show the direction.
- The cut-offs come from one month of SPY one-minute bars. What counts as narrow differs by symbol and session.
- Equal readings mean equal spread relative to price, not equal dollars: a 1 dollar band reads far wider on a 50 dollar stock than on a 765 dollar one.