Bollinger Bands and %B

Measures: where price sits inside its own recent volatility envelope.

Formula:

Mid   = SMA_20(C)
σ     = population stdev of last 20 closes
      = √( (1/20) Σ (C_i − Mid)² )
Upper = Mid + 2σ        Lower = Mid − 2σ

%B    = (C − Lower) / (Upper − Lower)

%B = 1.0 at the upper band, 0.0 at the lower, 0.5 at the mean; it can exceed [0,1] when price pierces a band.

How Thresher uses it (Structure family): extremes only — %B > 0.98 means price is pressing the upper band (stretched, −0.20 even for longs: chasing here buys the worst short-term price); %B < 0.02 means washed out (+0.20). Between the extremes %B casts no vote; the price-vs-mean component (I.1) covers the middle ground.

Limitations: band touches are not reversal signals — strong trends "walk the band" for extended runs. That's exactly why the engine penalizes entry timing at extremes rather than flipping direction on them.

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