Bollinger Bands Stock Price Action in Ranging Stock Trading Markets

Bollinger Bands Stock Trading Indicator is also used to identify periods when a stock market trend is overextended. The guidelines below are considered when applying this stock indicator to a sideways stocks trend.

Bollinger Bands Stock Trading Indicator is very important because it is used to give stock trading signals that a stock price breakout may be upcoming.

During a stock trending market these techniques don't hold, this only holds as long as Bollinger Bands are pointing sideways.

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

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

• If stocks price has bounced off the lower band crossed the center-line moving average then the upper band can be used a sell level.
• If stocks 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 Stock Markets - Bollinger Bands Strategy

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

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