Bollinger Bands - Fib Ratios Technical Analysis & Signals
Derived from the original Bollinger bands.
The Bollinger Fib ratios is a volatility based indicators but it doesn't use the standard deviation to calculate the width of the bands instead it uses a smoothed ATR that are multiplied with Fibonacci ratios of 1.618, 2.618, & 4.236.
The smoothed lines that are multiplied with Fibo ratios are then added or subtracted from the moving average.
This forms Three upper Fibo bands & 3 lower Fibo bands
The middle band forms the basis of the trend.
FX Technical Analysis & Generating Signals
This MT5 indicator used to determine point of support and resistance for a currency pair.
Lines below represent support points while those above are resistance zones.
The outermost bands provide the strongest resistance/support.
Inner most bands provide least support/resistance.
The innermost band represents Fibo 38.20% retracement level
The second band represents Fib 50% retracement level
The outermost band represents Fib 61.8% retracement level
The Indicator is used to determine points where forex price might reverse. (Forex Price Pullback Levels)
When forex price hits one of the lines & reverses then an entry or exit signal is generated.
However, it is always good to combine the signal with other confirmation indicators such as the moving average to confirm the signal as shown below.
Technical Analysis in FX Trading
