Bollinger Band Strategies

Bollinger Band Indicator Strategy

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

Bollinger Band 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 will move within these three3 bollinger bands.

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

The example of Bollinger Bands indicator is displayed below.

3 XAU USD Bollinger Band: Upper, Lower and Middle Bands Examples Explained

Bollinger Band Indicator - How to Trade with Bollinger Bands XAU USD 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 & the more the Bollinger band widen. Low price volatility means the standard deviation is lower & the bollinger bands contract.

Bollinger Band 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 market.
Periods of high price volatility - extended trends, trending markets.
Support and resistance zones of the price.
Buy & Sell points of the price.

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Trade Forex Trading

Bollinger Band Strategies

Bollinger Band Indicator Strategy