Articles for traders
Technical analysis indicator "Bollinger"
Bollinger Bands (Bollinger bands) - technical analysis indicator indicating the current deviation quotations. The indicator is based on the standard deviation of the simple moving average (Moving Average indicator). Drawn directly on the chart.
Bollinger Bands consists of two uneven lines, limiting the movement of prices above and below. This kind of support and resistance lines, basically they do not relate to the time schedule, followed by the price, narrowing and widening.
Type of standard deviation: default - 2.
Period moving average. Distributed: 7, 13, 20. Adjustable individually for each trading instrument.
Bollinger Bands are showing the price position relative to the average trading range. Indicator is a zone within which the values are considered normal. Shopping channel region defined by an upper and a lower line in the center is a moving average. The width of the dynamically varies proportionally standard deviation from the moving average.
Standard deviation depends on the volatility - self-regulating strip: their width increases during high volatility decreases more quiet periods.
A classical signal to the input of the market price is according to the indication output of breakdown trade corridor with an upper or lower limit.
Finding rates inside the shopping channel Bollinger bands means the absence of the indicator signals. However, the price movement, from one border usually leads to the opposite, that allows to predict the limit of the price change. Especially useful for intraday trading.
For more information you can learn from the book of the author of the indicator "Bollinger on Bollinger Bands"
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