Bollinger Bands Price Action in Trending Markets

Bollinger Bands indicator is used to identify & analyze trending markets. In a trending market this indicator clearly shows up or down direction.

Bollinger Bands indicator can be used to determine the direction of the trend. In an upward trend Bollinger Bands indicator will clearly show the direction of the trend, it will be heading upwards and price will be above middle Bollinger.

In a downwards trend the price will be below the middle band the bands will be heading downwards.

By observing the Bollinger bands indicator patterns formed by Bollinger bands a trader can determine the direction in which the market is likely to move.

Bollinger Bands Indicator Patterns and Continuation Signals

Stock Upwards Trend

• During an upswing, the candles will stay within the upper Bollinger band the central moving average.
• Prices that close above the upper band are a sign of bullish continuation signal.
• Prices can hug/ride the upper band during an upward trend

Upward Trend Strategy Method Using Bollinger Band Strategy

Downwards Trend

• During a down swing, the candles will stay within the moving average and the lower band.
• Prices that close below the lower band are a sign of bearish continuation signal.
• Prices can hug/ride the lower band during an downward trend

Down-ward Trend Strategy Method Using Bollinger Band Strategy