Technical Analysis Using Bollinger Bands Volatility Indicator
The Trading Bollinger Band Volatility Indicator are self adjusting which means the Bollinger bands widen and narrow depending on price volatility.
Standard Deviation is the statistical measure of price volatility that is used to calculate the widening of the trading Bollinger bands or narrowing of the trading Bollinger bands. Standard deviation will be higher when prices are changing significantly and Standard deviation will be lower when the market prices are not changing a lot.
- When the price volatility is high the Bollinger Bands widen - Bollinger Bands Breakout Strategy.
- When xauusd trading the price volatility is low the Bollinger Bands narrows - Bollinger Bands Consolidation Strategy.
Bollinger Band Consolidation Strategy
Narrowing of the trading Bollinger Bands is a sign of price consolidation and is known as the Bollinger Bands Squeeze.
When the Bollinger Bands indicator display narrow standard deviation it is usually a time of price consolidation, & this is also a signal that there will be a price breakout and it shows that traders are adjusting their trade positions for a new trend move. Also, the longer the prices stay within the narrow Bollinger Band range the greater the chance of a price break out.
Bollinger Band Squeeze - Bollinger Bands Break Out Trading Strategy Method
XAUUSD Bollinger Band Volatility Break out
Widening of Bollinger Bands indicator is a sign of a price breakout & this is known as the Bollinger Band Bulge.
Bollinger Band indicator that are far apart can be interpreted as a signal that a trend reversal is likely to happen. In the Bollinger Bands indicator example shown below, the trading Bollinger Bands get very wide as a result of high market price volatility. The trend reverses as prices reach an extreme level according to statistics & the theory of normal distribution. The "Bollinger Bands Bulge" predicts the change of the trend to a downwards trend.
Bollinger Band Bulge - Bollinger Bands Volatility Breakout - Bollinger Bands Breakout Strategy Method
Bollinger Band Volatility XAUUSD Breakout - XAUUSD Technical Analysis Using Bollinger Bands Volatility Indicator - Bollinger Bands Breakout Strategy Method
