Chaining GetBollingerBands with GetSlope

[scottManning42]

I am using the GetSlope function chained to the GetBollingerBands function.

List bandResults = quoteList.GetBollingerBands(20, 2.5).ToList();
List bbSlopeResults = quoteList.GetBollingerBands(20, 2.5).GetSlope(20).ToList();
List testList = quoteList.GetSlope(20).ToList();

When I call GetSlope on the Quote class list, it appears to use the Close Price, which is perfect, and I see a slope I would expect for the stock’s price increase. When I chain GetBollingerBands with GetSlope, the slope is near zero, and I was wondering what value out of the BollingerBandsResult class GetSlope is looking at to get a near zero slope.

For example, the slope for the quote list is typically like 1.03102255639097, but the slope for GetBollingerBands and GetSlope chained together is like 0.00390977443609022

[DaveSkender]

I can see in our code that we selected PercentB as the chained value.

https://github.com/DaveSkender/Stock.Indicators/blob/b49d767bf07992a2aff3c43822d40db9f40bd034/src/a-d/BollingerBands/BollingerBands.Models.cs#L19

---

I think my reasoning behind this is that it is the most informative of the result data + if you really wanted Close or the SMA centerline chained, you could generate those separately. So, if you're doing a chain like:

IEnumerable<SlopeResult> percentBSlopes = quotes
    .GetBollingerBands(lookbackPeriods, standardDeviations)
    .GetSlope(5);

That Slope value would tell you how it's vectoring towards one of the extreme boundaries.

[DaveSkender]

Since the centerline of BB is just SMA, if you wanted the slope of the channel, it'd be:

IEnumerable<SlopeResult> centerlineSlopes = quotes
    .GetSma(lookbackPeriods)
    .GetSlope(10);

[DaveSkender]

As a side note, if you wanted a different component of the IQuote for slope, other than default Close, you can cull what you want.

IEnumerable<SlopeResult> hl2Slopes= quotes
    .Use(CandlePart.HL2)
    .GetSlope(5);

[scottManning42]

Thank you for the quick answers. I love the library

[scottManning42]

I have a quick question about the percentB value in the Bollinger Bands. I know this is the percentage of the SMA line's position between the high and low ranges. A value of 0.8226 indicates that the SMA is near the center between the high and low ranges. Since it is a percentage, I wanted to make sure it is not 82.26% (i.e., multiple by 100). From my research on the stock I am using in the testing and from the Fidelity chart, the SMA line is in the middle between the high and low lines, but I wanted to double-check my assumption.

[DaveSkender]

Technically the SMA (blue dash line) is always exactly centered between the two bands, spaced out by a standard deviation factor.
This indicator is really about tracking price against normal distribution, where if price follows a normal distribution, statistically it'd be between 2 standard deviations 95% of the time.

---

If the current period price were right on the centerline of the channel, PercentB (%b) would be 0.5 (50%). At the top line 1 (100%), bottom line 0 (0%), so anything above 1 or below 0 indicates the price has deviated beyond standardDeviations from its average price (i.e., expect mean reversion).

We also provide ZScore which is standard deviations from the mean centerline and Width (aka BandWidth) which is a normalized width.

https://github.com/DaveSkender/Stock.Indicators/blob/b49d767bf07992a2aff3c43822d40db9f40bd034/src/a-d/BollingerBands/BollingerBands.Series.cs#L46-L50

[DaveSkender]

This is actually a decent indicator for sideways price trends like we're seeing in the market right now.
The narrowing here is interesting. It's telling me that there will likely be a volatility breakout (up or down) in the next 3-4 weeks.

[DaveSkender]

It's interesting sometimes to come back and look at these to validate indicator supported intuition.
In this Feb 2nd chart (above), the price breached the standard BB(20,2) top line on Jan 28 and it reversed; the narrowing of the BB lines also implied a more significant breakout of some kind.

(yellow arrow is Feb 2nd)