Stock Trading Bollinger Bands Volatility Breakout
The Stocks Trading Bollinger Bands Volatility Indicator are self adjusting which means the Bollinger bands widen and narrow depending on stocks price volatility.
Standard Deviation is the statistical measure of stocks price volatility that is used to calculate the widening of the stocks trading Bollinger bands or narrowing of the stocks trading Bollinger bands. Standard deviation will be higher when the stocks prices are changing significantly and Standard deviation will be lower when the stock trading market stocks prices are not changing a lot.
- When the stocks price volatility is high the Bollinger Bands widen - Bollinger Bands Breakout Trading Strategy.
- When stocks trading the stocks price volatility is low the Bollinger Bands narrows - Bollinger Bands Consolidation Trading Strategy.
The Bollinger Band Squeeze
Narrowing of the stocks trading Bollinger Bands is a sign of stocks price consolidation and is known as the Bollinger Bands Squeeze.
When the Bollinger Bands indicator display narrow standard deviation it is usually a time of stocks price consolidation, and this is also a stocks signal that there will be a stocks price breakout and it shows that stocks traders are adjusting their stocks trade positions for a new stocks trend move. Also, the longer the stocks prices stay within the narrow Bollinger Bands range the greater the chance of a stocks price breakout.
Bollinger Bands Squeeze - Bollinger Bands Breakout Stock Trading Strategy - Bollinger Bands Consolidation Trading Strategy
The Bollinger Bands Bulge
The widening of Bollinger Bands indicator is a sign of a stocks price breakout and this is known as the Bollinger Bands Bulge.
Bollinger Bands indicator that are far apart can be interpreted as a stocks signal that a stocks trend reversal is likely to happen. In the Bollinger Bands indicator stocks example illustrated and explained below, the stocks trading Bollinger Bands get very wide as a result of high stocks market price volatility. The stocks trend reverses as stocks prices reach an extreme level according to statistics and the theory of normal distribution. The "Bollinger Bands Bulge" predicts the change of the trend to a stocks downward stock trend.
Bollinger Bands Bulge - Bollinger Bands Volatility Stocks Trading Breakout - Bollinger Bands Breakout Trading Strategy
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