- Bollinger Bands Strategy – How To Trade The Squeeze
- Bollinger Bands® | Forex Indicators Guide
- Bollinger Bands BB | Articles | Forex | Fxpro Help Centre
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Bollinger Bands Strategy – How To Trade The Squeeze
As per John Bollinger’s recommendations, moving averages of less than 65 periods in length don’t work very well with Bollinger Bands.
Bollinger Bands® | Forex Indicators Guide
You are not obsessed with getting in a position and it wildly swinging in your favor. Nor are you looking to be a prophet of sorts and try to predict how far a stock should or should not run.
Bollinger Bands BB | Articles | Forex | Fxpro Help Centre
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.
Speaking of the last, Bollinger Bands are also capable of aiding double top and double bottom pattern recognition and trading.
W and M patterns with Bollinger Bands
A double top or M pattern is a sell setup. With Bollinger Bands it occurs when the following sequence take place:
- price penetrates the lower band,
- pulls back toward the middle line,
- a new subsequent low is formed, and this low is above the lower band and never has touched it.
- a setup is confirmed when price reaches and crosses the middle Bollinger line.
Price moves outside the bands – trend continuation
When price moves and closes outside the Bollinger upper or lower bands, it implies a continuation of the trend. With it Bollinger Bands continue to widen as volatility rises.
But it is not always straight forward: at some point closing outside Bollinger Bands will mean price exhaustion and upcoming trend reversal.
Developed by John Bollinger, Bollinger Bands® are volatility bands placed above and below a moving average. Volatility is based on the standard deviation , which changes as volatility increases and decreases. The bands automatically widen when volatility increases and narrow when volatility decreases. This dynamic nature of Bollinger Bands also means they can be used on different securities with the standard settings. For signals, Bollinger Bands can be used to identify M-Tops and W-Bottoms or to determine the strength of the trend. Signals derived from narrowing BandWidth are discussed in the chart school article on BandWidth.
Conversely, when price touches the lower Bollinger Band and the RSI is above 85 and retreating, it indicates the trend should continue. If however a price touches the lower Band and the RSI is below 85 and falling (in an oversold state ), it indicates the trend may reverse and move upward.
Input : Close, Open, High, Low, Median, Typical, Weighted price. | Default : Close Price
Value used to derive the bands.