Forex Learning: Bollinger Bands (hereinafter we shall call BB) is one indicator that is also popular among traders. This indicator is named after its creator, John Bollinger.
Bollinger Bands can help you to measure the volatility of the market and estimate the range (range) price movements. This indicator consists of three lines that move to follow the movement of prices. The third line in question is the upper band, the middle band and lower band.
Bollinger Bands can help you to measure the volatility of the market and estimate the range (range) price movements. This indicator consists of three lines that move to follow the movement of prices. The third line in question is the upper band, the middle band and lower band.
Middle band itself is actually moving average, which is the basis for the calculation of the upper band and lower band. Usually used is a simple moving average. The distance between the upper band and lower band also middle band influenced by the volatility that occurs. The greater the volatility, the distance between the band will be widened and vice versa.
Thus, BB helps you to recognize whether the market is "busy" or it was "deserted". When BB widened, meaning that the market is "busy", whereas when B is narrower and tends to move flat, meaning that the market is "quiet".
Thus, BB helps you to recognize whether the market is "busy" or it was "deserted". When BB widened, meaning that the market is "busy", whereas when B is narrower and tends to move flat, meaning that the market is "quiet".
We will not discuss the calculation of the BB malibatkan high level math calculation. We will only discuss the use of BB in practice so that you can use to read the opportunities of the markets.
Implementation Strategies Trading Bounce
Bounce trading strategy you can apply to the BB. You will utilize the upper band and lower band as dynamic support and resistance (upper band as dynamic resistance, lower band as dynamic support). Middle band also later will you involve, primarily as a target.Prices tend to bounce back to the middle band after reaching the upper band or lower band. These symptoms do you use to look for entry point. The strategy, you are looking for a level of buy in the area looking for a level lower band or upper band sell in the area. The target of course is the area of the middle band.When the price reached the upper band, it is difficult for us to ascertain whether the price will stop there or it will penetrate into the top of the upper band. Though this area is a great area to sell. Well, the tips are waiting for confirmation of reflection in the form of candlestick or bar chart closed below the upper band. If you already find confirmation, you can sell. The target in the middle band.Similarly, how to determine whether the time is right to buy when the price has reached the lower band.Stop loss her where? Easy. Just search for the nearest support or resistance.BB bounce trading strategy by effectively used when the market is in a sideway keaadaan and use the long time frame, for example graph 4-hourly or daily charts. But did not rule can also be used during trending although it should be filled with caution.
Implementation Strategies Trading Bounce
Bounce trading strategy you can apply to the BB. You will utilize the upper band and lower band as dynamic support and resistance (upper band as dynamic resistance, lower band as dynamic support). Middle band also later will you involve, primarily as a target.Prices tend to bounce back to the middle band after reaching the upper band or lower band. These symptoms do you use to look for entry point. The strategy, you are looking for a level of buy in the area looking for a level lower band or upper band sell in the area. The target of course is the area of the middle band.When the price reached the upper band, it is difficult for us to ascertain whether the price will stop there or it will penetrate into the top of the upper band. Though this area is a great area to sell. Well, the tips are waiting for confirmation of reflection in the form of candlestick or bar chart closed below the upper band. If you already find confirmation, you can sell. The target in the middle band.Similarly, how to determine whether the time is right to buy when the price has reached the lower band.Stop loss her where? Easy. Just search for the nearest support or resistance.BB bounce trading strategy by effectively used when the market is in a sideway keaadaan and use the long time frame, for example graph 4-hourly or daily charts. But did not rule can also be used during trending although it should be filled with caution.
Note: not recommended to use BB bounce trading strategy in a state trending though possible!
Application of Breakout Trading Strategy
By using BB, you can also identify opportunities for breakout. We have discussed before that BB will tend to constrict when the market is "quiet". His philosophy (wow) was at that time the actual market participants are unsure of where to take. At that time, buyers and sellers (supply and demand) as strong, so the price is moving in a relatively narrow range. Because the price is moving in a narrow range, Bollinger band is also narrowed.Breakout happens usually followed by BB that is rapidly widening and prices break through the upper band or lower band. Conditions that be a signal for you to take action. If the upper band is breached, then the strategy is to buy. Conversely, if the lower band is breached, then the strategy was to sell.As we've discussed before, either bounce or breakout strategy has advantages and disadvantages. Likewise, the implementation of strategies and breakout bounce on BB.By applying stretegi breakout, You will be able to quickly "catch" the emerging opportunities seteleh breakout. However there are times when that happened just a false breakout, which you already know what the risk is.In anticipation of a false breakout, breakout strategy using the BB is usually applied on a smaller time frame, for example 1-hourly charts or smaller (15 minutes or 30 menutes).
Application of Breakout Trading Strategy
By using BB, you can also identify opportunities for breakout. We have discussed before that BB will tend to constrict when the market is "quiet". His philosophy (wow) was at that time the actual market participants are unsure of where to take. At that time, buyers and sellers (supply and demand) as strong, so the price is moving in a relatively narrow range. Because the price is moving in a narrow range, Bollinger band is also narrowed.Breakout happens usually followed by BB that is rapidly widening and prices break through the upper band or lower band. Conditions that be a signal for you to take action. If the upper band is breached, then the strategy is to buy. Conversely, if the lower band is breached, then the strategy was to sell.As we've discussed before, either bounce or breakout strategy has advantages and disadvantages. Likewise, the implementation of strategies and breakout bounce on BB.By applying stretegi breakout, You will be able to quickly "catch" the emerging opportunities seteleh breakout. However there are times when that happened just a false breakout, which you already know what the risk is.In anticipation of a false breakout, breakout strategy using the BB is usually applied on a smaller time frame, for example 1-hourly charts or smaller (15 minutes or 30 menutes).
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