How to Use Bollinger Bands and its Signals
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Bollinger Bands is one of the most popular technical analysis tools, where three different lines are drawn, with one below and one above the security price line.
There are 4 common signals that you may want to remember when using it. Band expansions, band contractions, hitting the upper band and hitting the lower band. The bandwidth widens and narrows depending on volatility. If it’s high, the band would widen and if the volatility decreases, then the band would narrow. These bands show oversold and overbought conditions in relation to a selected time period moving average.
Any indicator will always be useful by any trader. Its the part where you appropriate your strategy counts the most.
Get Your Free Membership Now!
Bollinger Bands is one of the most popular technical analysis tools, where three different lines are drawn, with one below and one above the security price line.
There are 4 common signals that you may want to remember when using it. Band expansions, band contractions, hitting the upper band and hitting the lower band. The bandwidth widens and narrows depending on volatility. If it’s high, the band would widen and if the volatility decreases, then the band would narrow. These bands show oversold and overbought conditions in relation to a selected time period moving average.
Any indicator will always be useful by any trader. Its the part where you appropriate your strategy counts the most.
