This indicator was later applied to the price trend analysis of futures, foreign exchange and precious metals outside the stock market. Because of its flexibility, intuition and trend, BOLL indicator has gradually become a popular indicator widely used by investors in the market. At the same time, the Boolean limit index BB is derived.
Brin limit (BB)= (closing price-stock price lower limit)/(stock price upper limit-stock price lower limit)
When BB> 1, it means that the stock price crosses the upper limit of the bollinger band; BB<0, representing the stock price crossing the lower limit of the Bollinger Band.
When BB is lower than bb, the selling signal generated by the stock price crossing the upper limit of Brin has high reliability; When the bottom of %BB is higher than the bottom, the buy signal generated when the stock price crosses the lower limit of Brin is highly reliable.
Judging from the deviation principle. When the stock price is at a high level and continues to rise, if BB fails to go up synchronously, or even turns down, it indicates that the stock price will reverse and fall, which is a selling signal; When the stock price is in the low price range and continues to fall, if BB does not fall synchronously, or even becomes too high gradually, it indicates that the stock price will rise in the opposite direction, which is a buying signal.
Referring to the Brin price limit width index, when the price limit width is reduced to 6% to 8%, the stock price trend will change greatly at any time, and a new trend will be launched.
In the actual market, the limit compression values of individual stocks or investment varieties are different. Readers should review the past historical data and correct the limit compression value according to its frequent low position.