Bollinger Bands Strategies

Bollinger Bands Indicator Strategy

Bollinger Bands indicator acts and is used as an estimate of the market volatility. Bollinger Bands indicator is a price overlay trading indicator.

Bollinger Bands indicator consists of 3 lines or bands: the middle band (moving average), an upper band a lower band. These 3 bands will enclose the price & the price action will move within these three bollinger bands.

Bollinger Bands indicator forms upper & lower bands around a MA. The default moving average MA for bollinger bands technical indicator is the 20-SMA. Bollinger Band indicator use the concept of standard deviation to form their upper and lower Bands.

The example of Bollinger Band indicator is displayed below.

3 XAUUSD Bollinger Bands: Upper, Lower and Middle Bands Examples Explained

Bollinger Bands Indicator - How to Trade with Bollinger Band XAUUSD Method

Because standard deviation is a measure of price volatility & volatility of the market is dynamic, the bollinger bands keep self adjusting their width. Higher price volatility means higher standard deviation and the more the Bollinger bands widen. Low price volatility means the standard deviation is lower and the bollinger bands contract.

Bollinger Bands forex indicator use price action to give a large amount of the price action movement information data. The price information given by the bollinger bands technical indicator includes:

Periods of low volatility - consolidation period of the trading market.
Periods of high price volatility - extended trends, trending markets.
Support and resistance zones of the price.
Buy and Sell points of the price.

More Tutorials:

Trade Forex Trading

Bollinger Bands Strategies

Bollinger Bands Indicator Strategy