The Bollinger Band Width is a technical indicator derived from the Bollinger Bands. It measures the difference between the upper and lower Bollinger Bands, providing insights into market volatility. A wider band indicates higher volatility, suggesting a stronger trend, while a narrower band suggests lower volatility, indicating a weaker or consolidating trend.

Syntax:

BollingerBandWidth[N](price)

This function takes two parameters:

• N: The number of periods used to calculate the moving average and the standard deviations for the Bollinger Bands.
• price: The price series used to calculate the Bollinger Bands (typically the closing price).

Example:

BBwidth = BollingerBandWidth[20](close)
BBwidthSlow = BollingerBandWidth[30](close)
RETURN BBwidth coloured(0,100,100), BBwidthSlow AS "more laggy BandWidth"

In this example, BBwidth calculates the Bollinger Band Width for a 20-period moving average using the closing prices. BBwidthSlow calculates it for a 30-period moving average, providing a slower response to price changes. The results are displayed with specific colors for visual distinction.

Additional Information:

The Bollinger Band Width is particularly useful for identifying periods of high and low market volatility. During high volatility periods, the bands widen, and during low volatility periods, the bands contract. This indicator does not provide directional signals but helps in understanding the market’s volatility state, which can be crucial for making informed trading decisions.