Bollinger band calculation

Bollinger bands are calculated in the following way:

⇒ An SMA of closing prices is calculated for a number of past time periods. By default, most charting software uses a 20-day SMA.

⇒ The standard deviation of these prices is calculated.

⇒ Prices limits ± 2 standard deviations from the average are calculated.

⇒ At the end of each trading day the average and standard deviation are recalculated, and this process is continued on a moving basis.

If you’re charting prices over a fairly long time period and using a weekly frequency the Bollinger bands will be based on weekly closing prices. I seldom use this format and prefer to use the bands with daily frequencies over relatively short time periods (less than one year).