From May 2010 issue of Futures magazine: Fixing the Bollinger Bands by David Rooke.
Popularized by John Bollinger, who gave them their name, Bollinger Bands are simply a plot of a multiple of the standard deviation of price from its Simple Moving Average (SMA), both above and below. By the use of standard deviation, we should reasonably expect that the distribution of price around the mean should conform to statistical normality, or get close to it.
Unfortunately, this is not the case for Bollinger Bands and has led to a search to fix the problem. Based on observations of Bollinger Bands, here are some of the issues:
This is the version that David Rooke proposes as a solution to fix the mentioned issues but in a percent representation (instead of drawing it on a main chart it is a separate window indicator showing the percent position of the price in the volatility bands).
This is the version that David Rooke proposes as a solution to Bollinger Bands issues.Linear Regression Study
Linear regression line with an addition of standard error channel projection.