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| MAR 1996
SIDEBAR: Indicators and Formulas
INDICATORS AND FORMULAS Bollinger bands are channel lines plotted two standard deviations above and below a 20-day simple moving average. A 20-day lookback period is also used for the standard deviation measurement. The formula for standard deviations is as follows: ... Standard deviation measures the difference between each day in the lookback period and the moving average, squares the differences so that they are all positive values, sums the differences and divides by N . The square root is then calculated of this ratio.
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