Secrets of How to Use Bollinger Bands Indicators - 100% Successful for Beginner Trading

The Bollinger Bands indicator is used to measure volatility and forex trading when the market is sideways.

Bollinger Bands are one of the technical indicators to measure volatility and determine the direction of price movement trends. In addition to the direction of the trend, this indicator is also used to determine the state of overbought and oversold. Characteristically, in sideways (ranging) market conditions, prices move between two bands (bands). This indicator was created by John Bollinger, a technician trader in 1980. Now, this indicator is very popular to be used in trading on various types of financial markets, including the forex market.



Elements in Bollinger Bands Indicators 


The Bollinger Bands indicator consists of a Simple Moving Average (SMA) with two bands or bands that are above and below the SMA line. The upper band is called the Upper Bollinger Band and the lower band is called the Lower Bollinger Band. Upper and Lower Bands are determined based on the addition and subtraction of SMA values to the standard deviations. Whereas the standard deviation measures the volatility to what extent the price can move from the true value. The formula

Upper Band = SMA (n) + k * Standard Deviation (n) 

Lower Band = SMA (n) - k * Standard Deviation (n)

n = measurement period (default: 2)

Also taking into account volatility measurements, the two bands will move according to market conditions. Bollinger Bands can be found on most trading platforms, including Metatrader4 (MT4) and Metatrader5 (MT5) with default parameters SMA: 20 periods, and standard deviations: 2. To place them, look for the Insert menu >>> Indicators >>> Trend >> > Bollinger Bands. Once applied to the chart, Bollinger Bands will look similar in the following EUR / USD Daily screenshots:

INDICATOR BOLLINGER BANS

In general, an overbought condition occurs when the price has touched the Upper Band, but the closing price (Close) is still below the Upper Band. While the condition is declared oversold when the price has touched the Lower Band, but is still closed above the Lower Band.

Hopefully the material that I submit can help you in understanding the Bollinger bans indicator, greetings SUCCESS TRADING

Secrets of How to Use Bollinger Bands Indicators - 100% Successful for Beginner Trading Secrets of How to Use Bollinger Bands Indicators - 100% Successful for Beginner Trading Reviewed by Kampus Seo on December 23, 2019 Rating: 5

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