Talk:Bollinger bands
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[edit] Chebyshev's inequality
Cherkash's assertion that "the bands by Chebyshev's inequality must contain at least 75% of prices, is incorrect." is itself incorrect. Chebyshev's inequality applies to all distributions, and for each value in an N-period sequence, the mean and standard deviation are fixed parameters of the distribution that generated that value. The fact that the simple moving average is a biased estimator of the mean only increases the estimated standard deviation.
The "Counter-example to which is a case of strong directional trend in prices accompanied by low volatility (the bands are narrow in this case and prices don't fit into the channel formed by the bands around the strongly-lagged moving average)." is self-contradicting. By the computational method used, a "strong directional trend" is itself a condition of high volatility, widening, not narrowing the bands, especially if "strongly-lagged." A simple moving average is not linear regression estimation. --216.77.225.171 19:38, 4 February 2007 (UTC)
The article makes opinionated statements about what the bands can and cannot be used for.
Name one.
