Trade Forex Trading

Analysis of Bollinger Band Width for XAUUSD and Associated Trading Signals

Developed by John Bollinger.

This xauusd/gold indicator is derived from the original Bollinger indicator.

Bandwidth is a measure of the width of the Bollinger Bands.

Calculation

Band-width = Upper Band - Lower Band

Middle Band

How to Set Bollinger Bandwidth Indicator in Chart on Platform

This tool functions as an oscillator, founded on the principle that price and volatility operate in cyclical patterns.

Periods of high price volatility is followed by the periods of low volatility.

When volatility is elevated, the bands are distanced from each other, resulting in a wider bandwidth.

During Periods of Low Market Volatility, The Bands on the Indicator Will Appear Narrow, and the Bandwidth Reading Will Also Be Low.

The blue line signifies the highest Bandwidth value for a previous number of specified periods.

This line also identifies the periods of high price volatility

The red line signifies the lowest bandwidth value over a specified number of previous periods.

This line also identifies the periods of low market volatility

Gold Analysis and How to Generate Signals

Consolidation - Bollinger Squeeze

Bollinger Bandwidth spots the squeeze, a time when price consolidates. Then the market breaks out one way.

Signals appear during price breakouts. They come from the indicator turning up after hitting the red line. When the bandwidth line rises, it means volatility increases with the breakout.

Bollinger Bandwidth for Gold Trades - Simple Buy Sell Signals from Bandwidth - No-Hype Bollinger Guide

Squeeze

How to Place Bollinger Bandwidth Indicator in Chart

Breakout Signal After Band-width Squeeze

However, this is a directionless indicator & needs to be combined together with another indicator such as the moving average MA to figure out the direction of the market trend/ Breakout.

Study More Topics and Tutorials:

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