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