Bollinger Bands Oil Trading Price Action in Ranging Oil Trading Markets

Bollinger Bands Oil Technical Indicator is also used to identify periods when a oil market trend is overextended. The guidelines below are considered when applying this oil indicator to a sideways oil trend.

Bollinger Bands Oil Technical Indicator is very important because it is used to give oil trading signals that a oil price breakout may be upcoming.

During a oil trending market these techniques do not hold, this only holds as long as Bollinger Bands are pointing sideways.

• If the crude oil price touches the upper band it can be considered overextended on the upside - overbought.
• If the crude oil price touches the lower band the crude oil price can be considered overextended on the bottom side - oversold.

One of the uses of Oil Trading Bollinger Band indicator is to use the above overbought and oversold oil trading guidelines to establish buy & sell targets during a ranging oil market.

• If crude oil price has bounced off the lower band crossed the center-line moving average then the upper band can be used a sell level.
• If crude oil price bounces down off the upper band crosses below the center moving average the lower band can be used as a buy level.

Trading Bollinger Bands in Ranging Oil Markets - Bollinger Bands Strategy

In the above ranging oil market the instances when the crude oil price hits the upper or lower bands can be used as profit targets for long/short oil trade positions.

Oil trades can be opened when the crude oil market hits the upper resistance level or lower support level. A stop loss oil order should be placed a few pips above or below depending on the oil trade opened, just in case the crude oil price action breaks out of the range within these Bollinger bands.