Bollinger Bands Forex Strategies
- How Bollinger Bands Works
- Bollinger Bands Market Volatility Anaysis
- Bollinger Bands Bulge and Squeeze
- Bollinger Bands Price Action in Trends
- Bollinger Bands Price Action in Range
- Bollinger Bands & Trend Reversals
- Bollinger Bands Forex Trading Strategy Summary
Bollinger Bands FX Indicator Strategy
Bollinger Bands indicator acts as a measure of volatility. Bollinger Bands indicator is a price overlay indicator.
Bollinger Bands indicator consists of three lines or bands: the middle band (moving average), an upper band a lower band. These 3 bands will enclose the price and the price action will move within these 3 bollinger bands.
Bollinger Bands indicator forms upper and lower bands around a moving average. Default moving average for bollinger bands forex indicator is the 20-SMA. Bollinger Band forex indicator use the concept of standard deviationss to form their upper & lower Bands.
The example of Bollinger Bands indicator is shown below.
Bollinger Band Indicator - How to Trade Forex with Bollinger Band Strategy
Because standard deviation is a measure of forex price volatility and volatility of the forex market is dynamic, the forex bollinger bands keep adjusting their width. Higher forex price volatility means higher standard deviation and the more the bollinger bands widen. Low forex price volatility means the standard deviation is lower and the bollinger bands contract.
Bollinger Bands fore indicator use price action to give a large amount of forex price action movement information. The forex price information given by the this bollinger bands forex indicator includes:
- Periods of low volatility- consolidation phase of the forex trading market.
- Periods of high volatility - extended trends, trending forex markets.
- Support and resistance levels of the forex price.
- Buy and Sell points of the forex price.
