Lesson 86 of 100 — From my market experience
Bollinger Bands — How is volatility measured, and when is price stretched?
Bollinger Bands consist of three lines around the price: a middle average, plus an upper and lower line set at a distance calculated from the price’s own volatility.
The idea: when the market moves sharply, the bands widen; when it calms down, they narrow.
Useful readings:
1️⃣ Extreme narrowing: the bands stay narrow for a while = the market is building energy — often followed by a strong move, but the bands don’t tell you which direction
2️⃣ Touching the upper band doesn’t mean “it has to go down”: in a strong trend, the price can hug the upper band for days
3️⃣ Price far outside the bands = stretched and extended — the odds of a return to the average are higher, but the timing is unknown
The common mistake is selling every time the price touches the upper band and buying every time it touches the lower one — that works in a sideways market and breaks you in a trend.
The takeaway: Bollinger Bands measure volatility — narrowing precedes a strong move of unknown direction, and touching the edges in a strong trend isn’t a reversal signal.
Which point was new to you? Write its number in the comments 👇
#العملات_الرقمية #تعلم_الكريبتو #Binance
⚠️ Educational content — not investment advice
Bollinger Bands — How is volatility measured, and when is price stretched?
Bollinger Bands consist of three lines around the price: a middle average, plus an upper and lower line set at a distance calculated from the price’s own volatility.
The idea: when the market moves sharply, the bands widen; when it calms down, they narrow.
Useful readings:
1️⃣ Extreme narrowing: the bands stay narrow for a while = the market is building energy — often followed by a strong move, but the bands don’t tell you which direction
2️⃣ Touching the upper band doesn’t mean “it has to go down”: in a strong trend, the price can hug the upper band for days
3️⃣ Price far outside the bands = stretched and extended — the odds of a return to the average are higher, but the timing is unknown
The common mistake is selling every time the price touches the upper band and buying every time it touches the lower one — that works in a sideways market and breaks you in a trend.
The takeaway: Bollinger Bands measure volatility — narrowing precedes a strong move of unknown direction, and touching the edges in a strong trend isn’t a reversal signal.
Which point was new to you? Write its number in the comments 👇
#العملات_الرقمية #تعلم_الكريبتو #Binance
⚠️ Educational content — not investment advice
