Bollinger Bands Strategy

• How Bollinger Bands Works
• Bollinger Bands Market Volatility Analysis
• Bollinger Bands Bulge and Squeeze
• Bollinger Bands Oil Trading Price Action in Trends
• Bollinger Bands Oil Trading Price Action in Range
• Bollinger Bands and Oil Trading Trend Reversals
• Bollinger Bands Oil Trading Strategy Summary

Bollinger Bands Oil Indicator Strategy

Bollinger Bands indicator acts as a measure of volatility. Bollinger Bands indicator is a oil price overlay 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 crude oil price & the crude oil price action will move within these three bollinger bands.

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

The example of Bollinger Bands indicator is shown below.

Bollinger Band Crude Oil Indicator - How to Trade Oil Trading with Bollinger Band Strategy

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

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

• Periods of low volatility- consolidation phase of the oil market.
• Periods of high volatility - extended trends, trending oil markets.
• Support and resistance levels of the crude oil price.
• Buy and Sell points of the crude oil price.