Where Should I Place a Stop-Loss using Bollinger Bands Indicator?

Determining Where Should You Place a StopLoss using Bollinger Bands Indicator?

Bollinger Band Indicator

Bollinger bands forex technical indicator use standard deviation as a measure of volatility. Since standard deviation technical indicator is a measure of volatility, the bands are self adjusting meaning they widen during periods of higher volatility and contract during periods of lower volatility.

Bollinger Band consist of 3 bands designed to encompass the majority of a trading instruments price action. The middle band is a basis for the intermediate-term trend, mostly it is a 20 day period simple moving average, which also serves as the base for calculating the upper band and lower band. The upper band's and the lower band's distance from the middle band is determined by price volatility.

Since these Bollinger bands are used to encompass the trading instrument price action, the bands can be used to set stop losses just outside the area of the bands.

Where Should I place a Stop Loss using Bollinger Bands Indicator? - How to Set a Stop Loss using Bollinger Bands Indicator