【Trading Techniques】Bollinger Bands are a useful tool for judging volatility and support/resistance
Bollinger Bands are a useful tool for judging volatility and support/resistance.
Practical uses of Bollinger Bands:
1. Price reaches the upper band + bearish signal = short
2. Price reaches the lower band + bullish signal = buy long
3. Price moves along the upper band = strong uptrend; hold
4. Price moves along the lower band = strong downtrend; hold
5. Bollinger Bands narrow = reversal/turning point is imminent
6. Bollinger Bands open up = a trend is starting
Note:
- Bollinger Bands work well in a ranging (sideways) market
- In a trending market, price will move along the band; don’t trade against the trend
- Combine with other indicators for a higher win rate
Bollinger Bands are a useful tool for judging volatility and support/resistance.
Practical uses of Bollinger Bands:
1. Price reaches the upper band + bearish signal = short
2. Price reaches the lower band + bullish signal = buy long
3. Price moves along the upper band = strong uptrend; hold
4. Price moves along the lower band = strong downtrend; hold
5. Bollinger Bands narrow = reversal/turning point is imminent
6. Bollinger Bands open up = a trend is starting
Note:
- Bollinger Bands work well in a ranging (sideways) market
- In a trending market, price will move along the band; don’t trade against the trend
- Combine with other indicators for a higher win rate