Bollinger Band Stretch (20, 2σ)Mean reversion

Timeframe M1 · unit sigma

What it measures

How far the close has moved outside the standard Bollinger Bands (SMA-20 ± 2 standard deviations), expressed in additional standard deviations beyond the band edge. A value of 0 means the price is inside the bands; a positive value means it has pierced the upper band; a negative value means it has pierced the lower band.

How Janira reads it (bullish vs bearish)

When the value is 0, price is within its expected statistical range (roughly 95% of observations in a normal distribution lie inside 2-sigma bands). A positive value of +0.5 means price is 0.5 standard deviations beyond the upper Bollinger Band. The larger the magnitude, the rarer the observation. Prices routinely closing outside the bands suggest either a trend breakout or a highly overextended condition, depending on context.

In plain language

Bollinger Bands are like a statistical comfort zone drawn around the average price. This indicator measures whether and how far the price has stepped outside that comfort zone. Zero means it is still inside the fence; a positive number means it has climbed over the upper fence; a negative number means it has gone below the lower fence.

Scenarios

Value = 0 (inside bands): Price is within its statistically normal 20-bar range. No band breach - no exceptional extension signal from Bollinger geometry.
Value between 0 and +0.5 (just above upper band): Price has barely poked above the upper band. A moderate stretch - common during trend days, but in range-bound conditions it has historically preceded consolidation.
Value above +0.5 (meaningfully outside upper band): Price is significantly beyond the upper Bollinger Band. The further outside, the rarer and more mean-reversion tension-loaded the reading.
Value below 0 (outside lower band): The symmetric case - price is below the lower band. The magnitude measures the degree of downward overshoot beyond the statistical floor.

More mean reversion indicators

Z-score Close vs SMA-20 VWAP Deviation in Sigma Distance to SMA-20 in Std Deviations Percent Below 20-Bar Rolling High Percent Above 20-Bar Rolling Low RSI Extremity Score (14)Mean Reversion Composite Score 50-Bar Range Position (Centered)

Janira computes Bollinger Band Stretch (20, 2σ) deterministically from live price action, the same way for every reading - no discretion, no hidden weighting. This page explains the method; it is not a live reading and not advice.