What settings should I use for Bollinger bands in Insight Trader?
It will depend on what you are trying to do.
Bollinger suggested that for general use, a 20 period moving average and two standard deviations for the bands is appropriate.
For short-term traders he suggests a 10 period moving average with the bands at 1.9 standard deviations. He also said that periods less than 10 for the moving average are not very effective.
For longer-term traders, he suggests a 50 period moving average with 2.1 standard deviations for the bands.
So, you have to decide which you are first. Then you need to test what you are trying to do over long periods of past data to ensure that you understand how it works. Make sure you have included substantial period when the markets you intend to trade have been in uptrends, downtrends and trading ranges.
For a further explanation of Bollinger Bands, see my article Strike up the Bands in December 2003 Shares magazine.
In Insight Trader, you are asked for:
Time Constant in Units. I am not sure why it is worded this way, but it simply means how many periods (days, weeks or months, depending on the compression of the data file you are using) do you want for your moving average.
Lead+/- in Units.This is simply asking if you want to displace the moving average in time and if so by how many periods. I am not sure why this is there. To my knowledge, Bollinger did not use a lead or lag and I have not seen any literature on it. If you want to use this, you will need to research it. Unless you have researched it and understand what you are doing, I would leave it set at zero.
Standard Deviations. This is simply how many standard deviations you want to use for the bands. I suggest you use Bollinger's settings as a starting point and test them and variations to suit your investment or trading plan.