Best Bollinger Bands (BB%) settings

In last week's weekly $BTC update I described that I had believed that the science behind the Bollinger Bands lay in the Gaussian "normal" distribution (also known as the bell curve).

To save you the University statistics lecture ram packed with mathematical notation I'll just copy and paste the definition provided by investopedia.com :

"Normal distribution, also known as the Gaussian distribution, is a probability distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean. In graphical form, the normal distribution appears as a "bell curve"."

That 95% of the variance around the average is contained within 2 "standard deviations" (a statistic that represents the dispersion of prices around the average price) is why I believe that the default setting for the Bollinger Bands is by default set to two.

However, the Gaussian distribution is also introduced to students as the "68, 95, 99 curve"  because ~68% of the distribution in price is located within 1 standard deviation of the average; ~95% within 2 standard deviations, and ~99% within 3 standard deviations

and the 0.3% is disregarded as outliers / extreme cases.

However, you are not to simply change the settings on your BB% from 2 to 3 for there are a host of pre-requisites that must be satisfied in order for a given data set to be classified as normally distributed. 

However, statisticians assume that all data sets are at mercy to the "central limit theorem" and "the law of large numbers". Two theories upon which all of modern "social science" lie. 

The first claims that if the sample size is large enough that all datasets are normally distributed, and the second that the more samples that you take the more reliable representative of the total dataset is a given statistic.

I am not advocating for painstaking calculations prior to making a trade, but rather that you choose a higher number for the moving average (significantly higher than 20) and that you reference multiple time frames before settling on a given entry or exit when based on Bollinger Band boundaries.

Personally, on the daily chart my preference is somewhere around 52 - 55 and smaller time frames 200 and greater.

Experiment, with the differing moving average lengths with the 3 standard deviations setting observe the historical reliability and decide upon your own moving average lengths that you'll decide to base your entry and exit from the intersection with price and the boundaries (long and short).

Just sharing what I am doing 
DYOR

Banter 0n, Banter Strong!
✌️