Bollinger Bands® are used to measure the highness or lowness of the price relative to previous trades. The %B value quantifies a security’s price relative to the upper and lower Bollinger Bands®. The %B component of the Bollinger Bands® also allows you to better pinpoint proper entry and exit levels when trading stocks.
%B equals 0 when the price is at the lower band
%B is below 0 when the price is below the lower bound
%B equals 1 when the price is at the upper band
%B is above 1 when the price is above the upper band
%B is below .50 when the price is below the middle band
%B is above .50 when the price is above the middle band
%B = (Price – Lower Band) / (Upper Band – Lower Band)