Bollinger %B
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Definition
%B expresses where price sits relative to the Bollinger Bands as a single number: 1.0 at the upper band, 0.0 at the lower band, and 0.5 at the middle band.
How to read it
%B > 1 means price is above the upper band (stretched high); %B < 0 means below the lower band (stretched low); 0.5 is the mean. It converts the visual band position into a quantity you can test, alert on, and compare across instruments. In trends, price 'walking the band' keeps %B near or above 1 (uptrend) or near/below 0 (downtrend); in ranges %B oscillates between 0 and 1 for mean-reversion.
How practitioners use it
Used as context among multiple indicators — never as a standalone signal to act.
Less common professional uses
%B is regime-dependent: the same 1.05 reading is a fade in a range but a 'stay long' in a trend - condition the interpretation on a trend filter (ADX) or you will fade strength. Because %B is normalized by the bands, it is comparable across assets and time - useful for scanning a universe for the most-stretched names, which raw band charts cannot do. %B alone doesn't capture whether volatility is expanding or contracting; pair it with Bandwidth so you know if a %B extreme occurs during a squeeze (breakout risk) or a normal range.
Sources & provenance
John Bollinger
This page is educational content published by Pachira Aquatica Global LLC. It is not investment advice and not a recommendation.