The Percent B (%B) indicator is a simple momentum oscillator that has been derived from Bollinger Bands indicator. Bollinger Bands are a function of price and are plotted directly on the price chart. However, this does not give us a relative positioning of price with respect to the bands.

How %B indicator works

How to Calculate %B Indicator

%B tells us where we are in relation to the Bollinger Bands. Bollinger %B describes where the most recent close falls within the range created by the Upper and Lower Bollinger Bands or the degree to which the close falls outside the range created by the Upper and Lower Bollinger Bands. It is calculated using an adaptation of the formula for Stochastics.

How %B indicator works

There are 7 significant indications one can get from the %B indicator:

1. %B Above 1 = Price is Above the Upper Band
2. %B Equal to 1 = Price is at the Upper Band
3. %B Above .50 = Price is Above the Middle Line
4. %B Equal to .50 = Price is at the Moving Average
5. %B Below .50 = Price is Below the Middle Line
6. %B Equal to 0 = Price is at the Lower Band
7. %B Below 0 = Price is Below the Lower Band