Bollinger Bands CFDs Trading Indicator and CFD Price Volatility

When cfds price volatility is high; cfd prices close far away from the moving average, the cfd Bollinger Bands width increases to accommodate more possible cfds price action movement that can fall within 95 % of the mean.

Bollinger bands cfd indicator will widen as cfds price volatility widens. This will show as bollinger band bulges around the cfd price. When the cfd bollinger bands widen like this it is a continuation cfd pattern and cfds price will continue moving in this direction. This is normally a continuation cfds trade signal.

The Bollinger bands cfd indicator example shown below illustrates the Bollinger bulge.

High CFD Price Volatility - CFDs Bollinger Bands Indicator - Bollinger Band Bulge

When cfds price volatility is low: cfd prices close closer toward the moving average, the width decreases to reduce the possible cfds price action movement that can fall within 95 % of the mean.

When cfds price volatility is low cfds price will start to consolidate waiting for cfds price to breakout. When the cfd bollinger bands indicator is moving sideways it is best to stay on the sidelines and not to place any cfds trades.

The Bollinger bands indicator example is illustrated below when the cfd bollinger bands narrowed.

Low CFD Price Volatility - CFDs Bollinger Bands Trading Indicator - Bollinger Bands Squeeze