Bollinger Bands Strategies

• How Bollinger Bands Works
• Bollinger Bands Market Volatility Analysis
• Bollinger Bands Bulge and Squeeze
• Bollinger Bands Price Action in Trends
• Bollinger Bands Price Action in Range
• Bollinger Bands & Trend Reversals
• Bollinger Bands Stock Indices Strategy Summary

Bollinger Bands Indicator Strategy

Bollinger Bands indicator acts as a measure of volatility. Bollinger Bands indicator is a stock price overlay indicator.

Bollinger Bands indicator consists of 3 lines or bands: the middle band (moving average), an upper band a lower band. These 3 bands will enclose the stock price & the stock price action will move within these 3 bollinger bands.

Bollinger Bands indicator forms upper and lower bands around a moving average. The default moving average for bollinger bands indicator is the 20-SMA. Bollinger Band stock indicator use the concept of standard deviations to form their upper & lower Bands.

The example of Bollinger Bands indicator is shown below.

Bollinger Band Indicator - How to Trade Stock Indices with Bollinger Band Stock Indices Method

Because standard deviation is a measure of stock price volatility and volatility of the market is dynamic, the bollinger bands keep adjusting their width. Higher stock price volatility means higher standard deviation and the more the bollinger bands widen. Low stock price volatility means the standard deviation is lower and the bollinger bands contract.

Bollinger Bands forex indicator use stock price action to give a large amount of stock price action movement information. The stock price information given by the this bollinger bands indicator includes:

• Periods of low volatility- consolidation phase of the stock market.
• Periods of high volatility - extended trends, trending stock markets.
• Support and resistance levels of the stock price.
• Buy and Sell points of the stock price.