Using bollinger bands to improve your trading


More video on topic «Using bollinger bands to improve your trading»

When John Bollinger introduced the Bollinger Bands Strategy over 75 years ago I was skeptical about its longevity. I thought it would last a short time and would fade into the sunset like most popular trading strategies of the time.

1Minute Binary Options Strategy With Bollinger Bands And

Today I 8767 m going to discuss a great Bollinger Bands Strategy. Over the years I 8767 ve seen many trading strategies come and go. What typically happens is a trading strategy works well on specific market conditions and becomes very popular.

Bollinger Bands Forex Strategies, List of Bollinger Bands

This is honestly my favorite of the strategies. If I gave you any other indication that I preferred one of the other signals, forget whatever I said earlier.

Note: If you really want to learn about the calculations of a Bollinger Band, then you can go to .

Because you are not asking much from the market in terms of price movement. From my personal experience of placing thousands of trades, the more profit you search for in the market, the less likely you will be right.

Looking at the chart above, you can see the bands squeezing together. The price has just started to break out of the top band. Based on this information, where do you think the price will go?

When price touches the upper Bollinger Band and RSI is below 75 and rising, it is an indication that the trend will continue. If however price touches the upper Band and the RSI is above 75 or possibly even higher (in an overbought state that is), the trend may reverse and decline (example provided below).

The initial bottom of this formation tends to have substantial volume and a sharp price pullback that closes outside of the lower bollinger band. These types of moves typically lead to what is called an "automatic rally." The high of the automatic rally tends to serve as the first level of resistance in the base building process that occurs before the stock moves higher.

Bollinger Bands have become the standard channel indicators for retail traders. These bands provide visual aids for compression patterns which occur prior to sudden breakouts.

If you said down, then you are correct! As you can see, the price settled back down towards the middle area of the bands.


Add a comment

Your e-mail will not be published. Required fields are marked *