Bollinger Bands Price Action in Trending Markets

Bollinger Bands indicator is used to identify and analyze trending markets. In a trending market this technical indicator clearly shows up or down direction.

Bollinger Bands indicator can be used to determine the direction of the trend. In an upward trend Bollinger Bands indicator will clearly show the direction of the trend, it will be heading upwards and trading price will be above middle Bollinger.

In a downward trend the trading price will be below the middle band the bands will be heading downwards.

By observing the Bollinger bands indicator patterns formed by Bollinger bands a trader can determine the direction in which the market is likely to move.

Bollinger Bands Indicator Patterns and Continuation Signals

Upward Trend

• During an upswing, the candlesticks will stay within the upper Bollinger band the central moving average.
• Prices that close above the upper band are a sign of bullish continuation trade signal.
• Prices can hug/ride the upper band during an upwards trend

Upward Trend Strategy Using Bollinger Bands Forex Method

Downward Trend

• During a down swing, the 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 trend

Downward Trend Strategy Using Bollinger Bands Forex Method