Bollinger Bands Strategy

Bollinger Band Strategy

Bollinger Band indicator is used as a measure of the price volatility. Bollinger Bands indicator is a price overlay trading indicator.

Bollinger Band indicator consists of 3 lines or bands: mid band (MA), an upper band a lower band. These 3 bands will enclose the price and the price will move within these three3 bollinger bands.

Bollinger Band indicator forms upper & lower bands around a moving average MA. Default moving average(MA) for bollinger bands indicator is the 20-SMA. Bollinger Band indicator use the formula of standard deviations to form their upper and lower Bands.

The example of Bollinger Band indicator is illustrated and shown below.

How to Use the 3 Bollinger Band in Gold Trading: Upper Band, Lower Band & Middle Band in Gold Explained

Bollinger Bands Indicator - How to Trade with Bollinger Bands Strategy

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

Bollinger Band fx indicator use price action to give a big amount of the price action movement information. The price information given by the bollinger bands indicator includes:

Periods of low price volatility - consolidation phase of the trading market.
Periods of high price volatility - extended trends, trending markets.
Support and resistance zones of the price.
Buy and Sell points of the price.

Study More Tutorials & Courses:

Trade Gold Trading

Bollinger Bands Strategy

Bollinger Band Strategy