Bollinger Band®

Bollinger Bands are a type of statistical chart characterizing the prices and volatility over time of a financial instrument or commodity, using a formulaic method propounded by John Bollinger in the s. Financial traders employ these charts as a methodical tool to inform trading decisions.

Bollinger Bands consist of a middle band with two outer bands. Well, in this post I will provide you with six trading strategies you can test to see which works best for your trading style. In this example, if you decided to wait, you would have fell victim to a 30 pips bearish gap.

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Bollinger Bands, a chart indicator developed by John Bollinger, are used to measure a market’s volatility. John Bollinger Basically, this little tool tells us whether the market is quiet or whether the market is LOUD!

They arose from the need for adaptive trading bands and the observation that volatility was dynamic, not static as was widely believed at the time. Bollinger Bands can be used in most time frames, from very short-term periods, to hourly, daily, weekly or monthly. Bollinger Bands answer a question: Are prices high or low on a relative basis?

By definition price is high at the upper band and price is low at the lower band. That bit of information is incredibly valuable. It is even more powerful if combined with other tools such as other indicators for confirmation. Using the SPY as a surrogate so we can calculate volume indicators, we find that both day Intraday Intensity and Accumulation Distribution are quite positive, suggesting that if a breakout were to occur here it would be to the upside.

That stands in marked contrast to our more cautious approach to the market as a whole, so we will be monitoring this set-up quite carefully Bollinger On Bollinger Bands. John Bollinger developed Bollinger Bands in the early s and since their introduction 30 years ago they have become one of the most widely used technical indicators worldwide.

They are simply one indicator designed to provide traders with information regarding price volatility. John Bollinger suggests using them with two or three other non-correlated indicators that provide more direct market signals. He believes it is crucial to use indicators based on different types of data. This strategy has become one of the most useful tools for spotlighting extreme short-term price moves. Learn to pounce on the opportunity that arises when other traders run and hide.

Bollinger Bands have become an enormously popular market tool since the s but most traders fail to tap its true potential. This intraday strategy picks tops and bottoms based on a clear recovery following an extreme move. Find entry or exit signals or develop a complete system based on average true range.

Learn how traders can use "the usual suspects" standard for trend trading when it comes to choosing indicators for commodities investing. As we move into September, technology is back to being the hottest sector on Wall Street.

Use Bollinger Bands in forex trading to identify entry and exit points with ranging trends or to spot increasing volatility Learn more about how to identify buy and sell trading signals when implementing a moving average crossover strategy with Historical volatility is a long-term assessment of risk.

Here's how to calculate it in Excel. Find out about a common strategy that traders use with the volume-weighted average price, including the use of VWAP with See why the statistical concept of moving averages plays a central role for traders and chartists who rely on technical analysis