Bollinger Bands %B – FX Replay User Guide
%B tells you exactly where price sits between the upper and lower Bollinger Bands, sharpening your volatility and momentum reads—especially when you combine it with trend or reversal filters.
How It’s Calculated
%B = (Close – Lower Band) ÷ (Upper Band – Lower Band)
- %B = 1 → Price at Upper Band
- %B = 0 → Price at Lower Band
- %B > 1 → Price above Upper Band (potentially overbought)
- %B < 0 → Price below Lower Band (potentially oversold)
How to Use It on FX Replay
Precision Overbought / Oversold Detection
- %B near 1 or above → Price is stretched toward (or beyond) the upper limit.
- %B near 0 or below → Price is stretched toward (or beyond) the lower limit.
Trend Continuation or Reversal Cues
- If %B fails to reach 1 during an uptrend, momentum may be weakening.
- Use %B crossovers of 0.5 or custom thresholds (e.g., 0.8 / 0.2) to filter trend strength.
Actionable Use Cases
- Momentum Confirmation: When price breaks the upper band and %B > 1, pair with volume or momentum tools to confirm strength before entering continuation trades.
- Mean-Reversion Triggers: If %B stretches below 0 or above 1 and lines up with exhaustion clues (e.g., RSI divergence), consider a fade—carefully.
- Breakout Readiness: During “squeeze” phases, watch %B push past 0.8 or 0.2 to catch volatility expansion early.
- Pair With Core BB Strategy: Use %B as a signal enhancer for classic Bollinger setups—pullbacks, squeezes, or trend-following entries.
