Bollinger Bands Price Action in Trending Markets
Bollinger Band is used to identify & analyze trending markets. In a trending market this forex indicator clearly shows up/down direction.
Bollinger Band can be used to determine the direction of the trend. In an upward trend Bollinger Bands indicator will clearly show and illustrate the direction of the market price trend, it'll be heading upward & price will be above middle Bollinger.
In a downwards forex trend the forex price will be below the middle band the bands will be heading downward.
By observing the Bollinger band forex indicator patterns occurred by Bollinger band one can determine the direction in which the currency market is likely to move.
Bollinger Band Patterns & Continuation Signals
Upwards Trend
- During an upswing, the forex candles will stay within the upper Bollinger band the central moving average.
- Prices which close above the upper band are a sign of bullish continuation signal.
- Prices can hug/ride the upper band during an upwards forex trend
Upward Trend Strategy Using Bollinger Bands Strategy
Downward Trend
- During a downwards swing, the forex candlesticks will stay within the moving average and the lower band.
- Prices that close below the lower band are a sign of bearish continuation signal.
- Prices can hug/ride the lower band during an downwards forex trend
Downwards Trend Strategy Using Bollinger Bands Strategy
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