Lookback Period
The number of past periods an indicator examines when computing its current value.
Formula
Test: the indicator's value at time t depends on data from t - n + 1 through t, and on nothing earlier
Unit
days
In depth
The lookback determines an indicator's entire character — its responsiveness, its lag, its signal frequency and its noise level — which makes it the parameter most exposed to curve fitting. Standard values such as 14 for RSI, 20 for Bollinger Bands and 200 for the long moving average are conventions inherited from an era of manual calculation, not optimised results. A lookback should be chosen to match the intended holding period, so a two-week trade analysed on a 200-period average is measuring something irrelevant to the decision. Changing it after seeing results converts analysis into storytelling.
Worked example
A 14-period RSI on daily data covers roughly three trading weeks; the same 14 periods on a 15-minute chart covers three and a half hours. Identical formula, entirely different question being asked.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Lookback Period” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.