A Study on the Effectiveness of the Bollinger Band Indicator for Gaining Profits in the Equity Market.”

Abstract

This study evaluates the effectiveness of the Bollinger Band indicator as a tool for achieving profits in the equity market. Bollinger Bands, consisting of a simple moving average and two standard deviation lines, are widely used to gauge volatility and identify trading opportunities. The research employs a backtesting approach using historical stock price data from various major equity indices and individual stocks over a ten-year period. Trading strategies based on Bollinger Bands signals— such as price movements crossing the upper or lower bands—are analyzed for profitability and compared to a standard buy-and-hold strategy.