Bollinger Bands technical analysis
So for this lesson as you learn about Bollinger bands indicator, think of each as a tool for your trading. Not necessarily You will use these indicators but it's always good to have options, right?
Bollinger bands are used to measure market volatility. Basically, this little tool tells us whether the market is calm or very moved. When the market is slow moving bands contract when the market is very unstable, the bands expand.
Notice how in the following graph that when the price was kept quiet, the bands were closer to each other, whereas when the price went up, the bands were separated.
bollinger bands
It's that easy are bollinger bands. It is not necessary to know its history, how they are calculated or all of the mathematical formulas behind them, the most important thing is to learn ways to apply them in your operations.
The reversal in bollinger bands
One thing you should know about Bollinger bands is that the price tends to be returned to the midpoint between the bands, that's basically the idea of this rebound Bollinger. If this were to happen, you could say, looking at the chart below, As you can see, the price decline is stabilized towards the middle of the bands.
What you just saw is a classic rebound bollinger bands. The reason for which the price is returned is because the strips act as mini support and resistance levels. The longer the length of time you are with the bands, the stronger they will be. Many traders have developed systems based on these boards, and this strategy is best used when there is no clear trend in the market.
Now let's see how to use bollinger bands when the market is a trend.
When Bollinger Bands are close
When Bollinger bands are close to each other, it usually means a break will happen. If the fire starts to collapse above the upper band, the price continues to move up usually. If the fire starts to break below the lower band, the price usually goes down.
In the chart above can be seen as bands are very close to each other. The price break just above the upper band. According to this information where you see the price going then?
If you said up, you guessed right! Here's how it usually work bollinger bands when pressed against each other. This strategy is designed to observe a major move as soon as possible.
Now you know which are the Bollinger band and how to use them. There are many other strategies you can do with Bollinger bands, but the two that we present are the most common strategies related to them.
As always, it is advisable to combine Bollinger bands with some other indicator to have greater certainty when making decisions.
So for this lesson as you learn about Bollinger bands indicator, think of each as a tool for your trading. Not necessarily You will use these indicators but it's always good to have options, right?
Bollinger bands are used to measure market volatility. Basically, this little tool tells us whether the market is calm or very moved. When the market is slow moving bands contract when the market is very unstable, the bands expand.
Notice how in the following graph that when the price was kept quiet, the bands were closer to each other, whereas when the price went up, the bands were separated.
bollinger bands
It's that easy are bollinger bands. It is not necessary to know its history, how they are calculated or all of the mathematical formulas behind them, the most important thing is to learn ways to apply them in your operations.
The reversal in bollinger bands
One thing you should know about Bollinger bands is that the price tends to be returned to the midpoint between the bands, that's basically the idea of this rebound Bollinger. If this were to happen, you could say, looking at the chart below, As you can see, the price decline is stabilized towards the middle of the bands.
What you just saw is a classic rebound bollinger bands. The reason for which the price is returned is because the strips act as mini support and resistance levels. The longer the length of time you are with the bands, the stronger they will be. Many traders have developed systems based on these boards, and this strategy is best used when there is no clear trend in the market.
Now let's see how to use bollinger bands when the market is a trend.
When Bollinger Bands are close
When Bollinger bands are close to each other, it usually means a break will happen. If the fire starts to collapse above the upper band, the price continues to move up usually. If the fire starts to break below the lower band, the price usually goes down.
In the chart above can be seen as bands are very close to each other. The price break just above the upper band. According to this information where you see the price going then?
If you said up, you guessed right! Here's how it usually work bollinger bands when pressed against each other. This strategy is designed to observe a major move as soon as possible.
Now you know which are the Bollinger band and how to use them. There are many other strategies you can do with Bollinger bands, but the two that we present are the most common strategies related to them.
As always, it is advisable to combine Bollinger bands with some other indicator to have greater certainty when making decisions.
Forex is simple follow the trend and you will rich.
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