mark04 Posted October 30, 2009 Report Share Posted October 30, 2009 What Are Bollinger Bands? Bollinger bands are an integral part of just about every charting system We have ever seen but many traders are unfamiliar with how to use them. The bands are plotted at a standard deviation (statistical term for measuring volatility) around a moving average. Typically the standard deviation used is 2. A simple moving average in the middle. Most charting software defaults to a 20 period moving average. An upper band calculated around a simple moving average plus 2 standard deviations. A lower band calculated around a simple moving average minus 2 standard deviations. For our examples we will use the most common setting of a 20 period simple moving average. This will give us 3 bands, the middle band of a 20 period simple moving average and the upper and lower bands calculated around the middle band with standard deviation of 2. The closing price is most commonly used to calculate the moving average. The Squeeze The squeeze (tightening) is a period of low volatility and often happens before a big move. It can also help identify potential breakout areas Reversal In conjunction with other indicators you can identify potential reversal points. Trending Following Although Bollinger bands will not tell you when the trend has started if you combine it with certain indicators they will confirm the trend. Our Use Of Bollinger Bands As we mentioned earlier Bollinger bands are not really meant to be used as a signal generating indicator but in conjunction with another indictors can be very useful. We like to use Bollinger bands and RSI together to generate possible buy and sell signals or to confirm overbought or oversold areas. When the RSI reads below 30 and price is touching or pushing through the lower band then we know we are oversold and We will either consider buying the market or close existing short positions. Best Regards Mark, Quote Link to comment Share on other sites More sharing options...
Rick-novice Posted November 14, 2009 Report Share Posted November 14, 2009 Re: What Are Bollinger Bands? Is there often a move of a standard deviation that is significant? Like if price is more than 1 standard deviation from average then a change to a different indicator or target? Quote Link to comment Share on other sites More sharing options...
Albert666 Posted December 3, 2009 Report Share Posted December 3, 2009 Re: What Are Bollinger Bands? No rick, you can add several bollinger bands with different deviations on same chart. Like you said it gives you differents points of view or targets. Quote Link to comment Share on other sites More sharing options...
jmcnabb26 Posted February 26, 2010 Report Share Posted February 26, 2010 Re: What Are Bollinger Bands? I like this indicator... gives a good idea of strength and areas for a pop in price Quote Link to comment Share on other sites More sharing options...
thegatan Posted September 8, 2010 Report Share Posted September 8, 2010 What Are Bollinger Bands? Bollinger bands are an integral part of just about every charting system We have ever seen but many traders are unfamiliar with how to use them. The bands are plotted at a standard deviation (statistical term for measuring volatility) around a moving average. Typically the standard deviation used is 2. A simple moving average in the middle. Most charting software defaults to a 20 period moving average. An upper band calculated around a simple moving average plus 2 standard deviations. A lower band calculated around a simple moving average minus 2 standard deviations. For our examples we will use the most common setting of a 20 period simple moving average. This will give us 3 bands, the middle band of a 20 period simple moving average and the upper and lower bands calculated around the middle band with standard deviation of 2. The closing price is most commonly used to calculate the moving average. The Squeeze The squeeze (tightening) is a period of low volatility and often happens before a big move. It can also help identify potential breakout areas Reversal In conjunction with other indicators you can identify potential reversal points. Trending Following Although Bollinger bands will not tell you when the trend has started if you combine it with certain indicators they will confirm the trend. Our Use Of Bollinger Bands As we mentioned earlier Bollinger bands are not really meant to be used as a signal generating indicator but in conjunction with another indictors can be very useful. We like to use Bollinger bands and RSI together to generate possible buy and sell signals or to confirm overbought or oversold areas. When the RSI reads below 30 and price is touching or pushing through the lower band then we know we are oversold and We will either consider buying the market or close existing short positions. Best Regards Mark, hi mark, could you share indi with template? i am interesting with your strategy big appreciate for you could help me thanks thegatan Quote Link to comment Share on other sites More sharing options...
TWO Posted September 8, 2010 Report Share Posted September 8, 2010 StdDev is used in statistics but has no real value in trading Quote Link to comment Share on other sites More sharing options...
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