🕷️ Crawler Inspector

URL Lookup

Direct Parameter Lookup

Raw Queries and Responses

1. Shard Calculation

Query:

Response:

Calculated Shard: 143 (from laksa196)

2. Crawled Status Check

Query:

curl -X POST \
  'http://laksa143.int.ahrefs:8124/' \
  -H 'Content-Type: text/plain' \
  -H 'X-ClickHouse-Database: crawler3' \
  -H 'Authorization: Basic YXBpOg==' \
  -d 'SELECT getAhrefsURLFromUnparsed(src_unparsed) AS found_url, ifNull(toUnixTimestamp(download_stamp), 0) AS crawl_time, ifNull(toUnixTimestamp(props_url_first_seen), 0) AS first_indexed_time, download_http_code AS http_code, src_unparsed AS src_unparsed, src_root_hash AS src_root_hash, history_drop_reason AS history_drop_reason, meta_title AS meta_title, meta_descriptions AS meta_descriptions, attrs_boilerpipe_text AS attrs_boilerpipe_text, attrs_markdown AS attrs_markdown, attrs_readable_markdown AS attrs_readable_markdown, meta_canonical AS meta_canonical FROM crawler3.page_info_local FINAL PREWHERE (src_root_hash, src_unparsed) IN ((getAhrefsRootHashFromUnparsed(getAhrefsUnparsedNoserviceFromURL(\'https://blog.binomo1.com/what-is-the-bollinger-bands-trading-strategy/\')), getAhrefsUnparsedNoserviceFromURL(\'https://blog.binomo1.com/what-is-the-bollinger-bands-trading-strategy/\'))) FORMAT JSONEachRow'

Response:

{"found_url":"https:\/\/blog.binomo1.com\/what-is-the-bollinger-bands-trading-strategy\/","crawl_time":1776588101,"first_indexed_time":1707040377,"http_code":200,"src_unparsed":"com,binomo1!blog,\/what-is-the-bollinger-bands-trading-strategy\/ s443","src_root_hash":"13279327788873555343","history_drop_reason":null,"meta_title":"Key Bollinger Band Trading Strategies","meta_descriptions":["Bollinger Bands is one of the leading trading indicators that is used on all financial markets. Read this article to learn the most effective Bollinger Bands trading strategies."],"attrs_boilerpipe_text":"While it’s generally accepted that losses pull irrational traders out of asset markets,  a study from INSEAD showed that overconfident traders don’t leave the market despite\nlosses\n. However, those who want to avoid failures, may consider a Bollinger Bands trading strategy. \nBollinger Bands is a popular trading indicator used by traders and investors to define periods when the market is quiet or highly volatile. It’s one of the easiest and most effective trading tools. Keep reading to learn how to apply the indicator to your trades. \nTrading with up to 90% profit\nTry now\nBollinger Bands: the basics \nBollinger Bands is a technical tool that was developed by John Bollinger. The indicator consists of three lines: a middle line presented by a simple moving average and upper and lower bands, which are standard deviations above and below the middle line. \nThe Bollinger Bands indicator is applied to define a price’s volatility. When the bands are close to each other, the market is calm. If the price fluctuations increase, the distance between the bands widens. It can also help traders determine whether the market is overbought or oversold. \nWhen applying the indicator on the price chart, you need to determine only one parameter — period. The standard setting is 20. It’s usually used for higher timeframes, starting from 1-day. However, it doesn’t mean you shouldn’t use Bollinger Bands for short-term trades. You just need to reduce the period. Lower periods are more sensitive to price changes. It leads to a larger number of signals. \nEffective strategies in your mailbox\nSubscribe and discover a fund of trading knowledge\nSubscribe\nGreat! Please check your email\nWe’ve sent you an email to confirm your subscription\nSomething went wrong\nTry reloading the page. If that doesn’t help, please try again later\nBollinger Bands: definition and meaning for traders\nBollinger Bands are technical analysis forms that traders use for plotting trend lines. These lines are often at a two-standard deviation distance from the security price of an SMA (simple moving average). Since traders generally look for incremental price movements, determining the volatility can help them calculate the potential net profit.\nThe goal of Bollinger Bands is to inform traders when they should exit or enter a position. It does that by finding out when an asset is being overbought or oversold. Once the signal is received, traders may buy or sell an asset to obtain a profit.\nCreated by John Bollinger, Bollinger Bands signal potential changes in volatility. When you have security ranges (e.g., currency pairs), the Bollinger Bands can offer you clear signals as to when you should buy or sell an asset.\nBear in mind that sometimes this may lead to frustrating losses, as stop-out may occur ahead of time. This is why traders should consider using different factors as well when using Bollinger Bands. Use indicators to determine the exit and entry points, taking action accordingly.\nHow to calculate Bollinger Bands\nBollinger Bands are made out of three bands: lower, upper, and moving average. The easiest way to calculate the Bollinger Band is through a 20-day SMA (simple moving average) index applied to the middle band.\nYou calculate the upper band by taking the middle band, after which you add twice that amount’s daily standard deviation. To calculate the lower band, you take the middle band and subtract twice the daily standard deviation.\nOnce you have that in mind, use the following formulas to obtain your numbers:\nTP = (High + Low + Close) \/ 3\nBOLU = MA(TP,n)+m\n∗\nσ[TP,n]\nBOLD = MA(TP,n)−m\n∗\nσ[TP,n]\nWhere:\n·  TP = Typical Price\n·  BOLD: Lower Bollinger Band\n·  BOLU = Upper Bollinger Band\n·  MA = Moving Average\n·  m = no. of standard deviations\n·  n = no. of smoothing period days\n·  σ[TP,n] = standard deviation over the past n TP periods\n5 of the best scalping indicators to use right away\nYou can experiment with various indicators, but there are some you can use right away to build your best scalping strategy.\nRead more\nThe buying channel\nBollinger Bands are set over a price chart that includes a moving average along with the lower and upper bands. Between each band and moving average line, you will see an area that creates a range, commonly referred to as a channel. Bollinger Bands will show changes in relative volatility through the width of the band. If the band is wide, so is the volatility.\nThe buying channel is the one set above the moving average. The spot rates within this region will stay high when compared to the moving average. They suggest an upward momentum, meaning that it is the perfect time to buy. It is the opposite of the selling channel below the moving average, which suggests a downward momentum.\nBollinger Bands trading strategies\nAlthough you can develop your\nown trading strategy\nbased on the Bollinger Bands indicator, there are three major ways to use it. \n1. Bounce\nThe indicator’s bands are used as support and resistance levels. Thus, the upper band is a resistance boundary, while the lower band is a support boundary. You should remember that the price always tries to return to the middle line. \nThus, the idea is simple. When the price reaches the upper boundary, a trader can expect it to move down to the middle line. If the falling price reaches the lower boundary, a rebound towards the middle line can be expected. Such pullbacks can be used to enter the market.\nThe upper and lower bands are stronger on longer-term timeframes. \nThis approach works best when there is no strong trend, and the price moves sideways. It’s dangerous to apply this scheme when the price moves within a strong trend. During periods of solid trend, the bands widen. This may lead to wrong signals and losing trades. \n2. Squeeze\nAs it was mentioned above, upper and lower boundaries serve as resistance and support levels. This means that the price is supposed to rebound from them. But it’s not always the case. In periods of a strong trend, the price may go beyond a band for a while. \nThis may work as an entry point for trend traders. If the price breaks above the upper boundary, you can open a long position. If the price goes below the lower band, you can open a short trade. \nUsually, the distance between the bands narrows before the strong trend. Thus, this may work as a signal for early market entry. If you see the bands narrow, you can expect a strong trend to form.\n3. Relative strength\nThe Bollinger Bands indicator also helps traders determine an asset’s strength relative to its recent price range. The price can be considered relatively low or undervalued if it fluctuates near the lower band and relatively high or overvalued if it’s near the upper band. \nConfirm bands signal  \nYou should remember that there is no\ntrading strategy\nthat would be built on one indicator or pattern solely. Traders always look for signal confirmations from other tools. The best way is to find confirmation from 1-2 technical instruments. A large number of tools will confuse you by providing mixed alerts. \nChart patterns.\nAs bouncing is one of the leading Bollinger Bands trading approaches, you should look for a confirmation of the market reversal. There are popular reversal patterns that can be combined with the Bollinger Bands tool. If the price is traded near the upper boundary, you should look for bearish patterns, including head and shoulders and double and triple top. If the price is near the lower band, you need bullish reversal patterns. They include inverse head and shoulders, double bottom, and triple bottom. \nCandlestick patterns.\nIt’s also possible to get a confirmation on the price reversal from candlestick patterns. They usually consist of one or two candles. The top bearish reversal candlestick patterns are shooting star, evening star, and bearish harami. The leading bullish reversal patterns are a hammer, bullish harami, and bullish engulfing. \nIndicators.\nAs Bollinger Bands can reflect oversold and overbought conditions, you can apply other indicators that provide similar signals. These are the Relative Strength Index (RSI) and Stochastic Oscillator. As for the price reversal alerts, you can also use RSI and Stochastic Oscillator or try such tools as MACD and Moving Averages. \nFinal thoughts \nBollinger Bands is a technical indicator that helps traders in key trading goals — determining market volatility and setting support and resistance levels. Moreover, it’s quite simple. There is only one parameter you should set before implementing the indicator on the price chart, and its signals are obvious. It’s also possible to build your own Bollinger Bands trading strategy based on this indicator by changing the period and applying it to different timeframes. Always remember that there is no perfect indicator, and every signal should be confirmed.\nDisclaimer: No strategy can guarantee a 100% correct outcome of the trade.","attrs_markdown":"[![Logo Binomo](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAAJsAAAAkAQAAAAC2hnWBAAAAAnRSTlMAAHaTzTgAAAAPSURBVCjPY2AYBaNgZAEAAvQAAVIv2dYAAAAASUVORK5CYII=)![Logo Binomo](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/footerLogo.svg)](https:\/\/blog.binomo1.com\/)\n\n- [Blog](https:\/\/blog.binomo1.com\/)\n- [VIP](https:\/\/blog.binomo1.com\/vip\/)\n- [About us](https:\/\/blog.binomo1.com\/about-binomo\/)\n- [Promo](https:\/\/blog.binomo1.com\/promo\/)\n- [FAQ](https:\/\/blog.binomo1.com\/faq\/)\n\n[Start trading](https:\/\/binomo.onelink.me\/509527443\/sdeojkdp)\n\n- [![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAABgAAAAYAQAAAADIDABVAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2CgLQAAAGAAATeQF3gAAAAASUVORK5CYII=)![](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/flags\/en.svg) English](https:\/\/blog.binomo1.com\/what-is-the-bollinger-bands-trading-strategy\/)\n  - ![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAABgAAAAYAQAAAADIDABVAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2CgLQAAAGAAATeQF3gAAAAASUVORK5CYII=)\n    \n    ![](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/flags\/en.svg)\n    \n    English\n    ![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAAAsAAAAIAQAAAAAHQzglAAAAAnRSTlMAAHaTzTgAAAALSURBVAjXY2DADgAAGAABTQdqSAAAAABJRU5ErkJggg==)\n    \n    ![](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/check_mark.svg)\n  - [![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAABgAAAAYAQAAAADIDABVAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2CgLQAAAGAAATeQF3gAAAAASUVORK5CYII=)![](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/flags\/pt-pt.svg) Português](https:\/\/blog.binomo1.com\/pt-pt\/what-is-the-bollinger-bands-trading-strategy\/)\n  - [![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAABgAAAAYAQAAAADIDABVAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2CgLQAAAGAAATeQF3gAAAAASUVORK5CYII=)![](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/flags\/tr.svg) Türkçe](https:\/\/blog.binomo1.com\/tr\/)\n  - [![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAABgAAAAYAQAAAADIDABVAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2CgLQAAAGAAATeQF3gAAAAASUVORK5CYII=)![](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/flags\/id.svg) Indonesia](https:\/\/blog.binomo1.com\/id\/what-is-the-bollinger-bands-trading-strategy\/)\n  - [![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAABgAAAAYAQAAAADIDABVAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2CgLQAAAGAAATeQF3gAAAAASUVORK5CYII=)![](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/flags\/hi.svg) हिन्दी](https:\/\/blog.binomo1.com\/hi\/what-is-the-bollinger-bands-trading-strategy\/)\n\n\\<span\\>Like\\<\/span\\>\n\nShare\n\n[Copy link Link copied](https:\/\/blog.binomo1.com\/what-is-the-bollinger-bands-trading-strategy\/#copy)\n\n[Blog](https:\/\/blog.binomo1.com\/)\n\n[Strategies](https:\/\/blog.binomo1.com\/category\/strategies\/)\n\nWhat is the Bollinger Bands trading strategy?\n\n[Blog](https:\/\/blog.binomo1.com\/)\n- [Top](https:\/\/blog.binomo1.com\/what-is-the-bollinger-bands-trading-strategy\/)\n- [Bottom](https:\/\/blog.binomo1.com\/what-is-the-bollinger-bands-trading-strategy\/)\n\n[VIP](https:\/\/blog.binomo1.com\/vip\/)\n\n[About us](https:\/\/blog.binomo1.com\/about-binomo\/)\n\n[Promo](https:\/\/blog.binomo1.com\/promo\/)\n\n[Main](https:\/\/blog.binomo1.com\/)\n\n[Education](https:\/\/blog.binomo1.com\/education\/)\n\n[Binomo news](https:\/\/blog.binomo1.com\/platform-news\/)\n\n[How to trade](https:\/\/blog.binomo1.com\/what-is-the-bollinger-bands-trading-strategy\/)\n- [Strategies](https:\/\/blog.binomo1.com\/category\/strategies\/)\n- [Tips](https:\/\/blog.binomo1.com\/category\/tips\/)\n- [Money management](https:\/\/blog.binomo1.com\/category\/money-management\/)\n- [Trading psychology](https:\/\/blog.binomo1.com\/category\/trading-psychology\/)\n- [Technical analysis](https:\/\/blog.binomo1.com\/category\/technical-analysis\/)\n- [Indicators](https:\/\/blog.binomo1.com\/category\/indicators\/)\n\n[How to invest](https:\/\/blog.binomo1.com\/category\/how-to-invest\/)\n\n[How to save](https:\/\/blog.binomo1.com\/category\/how-to-save\/)\n\n[How to succeed](https:\/\/blog.binomo1.com\/what-is-the-bollinger-bands-trading-strategy\/)\n- [Success stories](https:\/\/blog.binomo1.com\/category\/success-stories\/)\n- [Personalities](https:\/\/blog.binomo1.com\/category\/personalities\/)\n- [Companies](https:\/\/blog.binomo1.com\/category\/companies\/)\n\n[How to be trendy](https:\/\/blog.binomo1.com\/what-is-the-bollinger-bands-trading-strategy\/)\n- [Lifestyle](https:\/\/blog.binomo1.com\/category\/lifestyle\/)\n- [Travel](https:\/\/blog.binomo1.com\/category\/travel\/)\n- [Technology](https:\/\/blog.binomo1.com\/category\/technology\/)\n- [Business](https:\/\/blog.binomo1.com\/category\/business\/)\n- [Culture](https:\/\/blog.binomo1.com\/category\/culture\/)\n\n[Quiz](https:\/\/blog.binomo1.com\/quiz\/)\n\n[Tests](https:\/\/blog.binomo1.com\/tests\/)\n\n![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAABBoAAAISAQAAAABKJJGlAAAAAnRSTlMAAHaTzTgAAABbSURBVHja7cExAQAAAMKg9U9tB2+gAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAD4DBNpAAHFF\/RbAAAAAElFTkSuQmCC)\n\n![](https:\/\/blog.binomo1.com\/wp-content\/uploads\/2022\/04\/163-1050x530.jpg)\n# What is the Bollinger Bands trading strategy?\n\n![Lee Wei](data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==)\n\n![Lee Wei](https:\/\/blog.binomo1.com\/wp-content\/uploads\/2022\/08\/lee-wei.svg)\n\n[By Lee Wei](https:\/\/blog.binomo1.com\/author\/lee-wei\/)\n\nJul 6, 2022\n\n![Lee Wei](data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==)\n\n![Lee Wei](https:\/\/blog.binomo1.com\/wp-content\/uploads\/2022\/08\/lee-wei.svg)\n\nLee Wei\n\nFinancial Analyst and Trading Strategist\n\nAs a financial planner, Lee helped people plan their retirement holistically and formulate sound investment policies. Certified Public Accountant and Chartered Financial Analyst.\n\n![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAAAwAAAAMAQAAAAB+DmFKAAAAAnRSTlMAAHaTzTgAAAALSURBVAjXY2AgDAAAJAABLh5xoAAAAABJRU5ErkJggg==)\n\n![](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/level.svg)\n\nLevel: Experienced\n\n![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAAAwAAAAOAQAAAAAzxsBBAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2AgFgAAACoAAbPCaxwAAAAASUVORK5CYII=)\n\n![](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/time.svg)\n\nReading time: 8 min\n\nListen\n\n![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAABAAAAAQAQAAAAA3iMLMAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2AgDQAAADAAAceqhY4AAAAASUVORK5CYII=)\n\n![](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/headphones.svg)\n\n4:13\n\nWhile it’s generally accepted that losses pull irrational traders out of asset markets, a study from INSEAD showed that overconfident traders don’t leave the market despite [losses](https:\/\/blog.binomo1.com\/what-to-do-when-the-stock-market-falls\/). However, those who want to avoid failures, may consider a Bollinger Bands trading strategy.\n\nBollinger Bands is a popular trading indicator used by traders and investors to define periods when the market is quiet or highly volatile. It’s one of the easiest and most effective trading tools. Keep reading to learn how to apply the indicator to your trades.\n\nTrading with up to 90% profit\n\n[Try now](https:\/\/binomo.onelink.me\/509527443\/sdeojkdp)\n## Bollinger Bands: the basics\nBollinger Bands is a technical tool that was developed by John Bollinger. The indicator consists of three lines: a middle line presented by a simple moving average and upper and lower bands, which are standard deviations above and below the middle line.\n\nThe Bollinger Bands indicator is applied to define a price’s volatility. When the bands are close to each other, the market is calm. If the price fluctuations increase, the distance between the bands widens. It can also help traders determine whether the market is overbought or oversold.\n\n[![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAAUoAAAC4AQAAAACtf5gOAAAAAnRSTlMAAHaTzTgAAAAfSURBVFjD7cEBDQAAAMKg909tDjegAAAAAAAAAODHAB7oAAHLNhe9AAAAAElFTkSuQmCC) ![](https:\/\/blog.binomo1.com\/wp-content\/uploads\/2022\/05\/226-330x184.jpg) What is a stop loss and how to use it?](https:\/\/blog.binomo1.com\/what-is-a-stop-loss-and-how-to-use-it\/)\n\nWhen applying the indicator on the price chart, you need to determine only one parameter — period. The standard setting is 20. It’s usually used for higher timeframes, starting from 1-day. However, it doesn’t mean you shouldn’t use Bollinger Bands for short-term trades. You just need to reduce the period. Lower periods are more sensitive to price changes. It leads to a larger number of signals.\n\nEffective strategies in your mailbox\n\nSubscribe and discover a fund of trading knowledge\n\nSubscribe\n\n![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAABgAAAAYAQAAAADIDABVAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2CgLQAAAGAAATeQF3gAAAAASUVORK5CYII=)\n\n![](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/subscribe-sent.svg)\n\nGreat! Please check your email\n\nWe’ve sent you an email to confirm your subscription\n\n![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAABgAAAAYAQAAAADIDABVAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2CgLQAAAGAAATeQF3gAAAAASUVORK5CYII=)\n\n![](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/subscribe-error.svg)\n\nSomething went wrong\n\nTry reloading the page. If that doesn’t help, please try again later\n## **Bollinger Bands: definition and meaning for traders**\nBollinger Bands are technical analysis forms that traders use for plotting trend lines. These lines are often at a two-standard deviation distance from the security price of an SMA (simple moving average). Since traders generally look for incremental price movements, determining the volatility can help them calculate the potential net profit.\n\nThe goal of Bollinger Bands is to inform traders when they should exit or enter a position. It does that by finding out when an asset is being overbought or oversold. Once the signal is received, traders may buy or sell an asset to obtain a profit.\n\nCreated by John Bollinger, Bollinger Bands signal potential changes in volatility. When you have security ranges (e.g., currency pairs), the Bollinger Bands can offer you clear signals as to when you should buy or sell an asset.\n\nBear in mind that sometimes this may lead to frustrating losses, as stop-out may occur ahead of time. This is why traders should consider using different factors as well when using Bollinger Bands. Use indicators to determine the exit and entry points, taking action accordingly.\n\n## **How to calculate Bollinger Bands**\nBollinger Bands are made out of three bands: lower, upper, and moving average. The easiest way to calculate the Bollinger Band is through a 20-day SMA (simple moving average) index applied to the middle band.\n\nStart from \\$10, earn to \\$1000\n\n[Trade now](https:\/\/binomo.onelink.me\/509527443\/sdeojkdp)\n\nYou calculate the upper band by taking the middle band, after which you add twice that amount’s daily standard deviation. To calculate the lower band, you take the middle band and subtract twice the daily standard deviation.\n\nOnce you have that in mind, use the following formulas to obtain your numbers:\n\n*TP = (High + Low + Close) \/ 3*\n\n*BOLU = MA(TP,n)+m**∗**σ\\[TP,n\\]*\n\n*BOLD = MA(TP,n)−m**∗**σ\\[TP,n\\]*\n\nWhere:\n\n· TP = Typical Price\n\n· BOLD: Lower Bollinger Band\n\n· BOLU = Upper Bollinger Band\n\n· MA = Moving Average\n\n· m = no. of standard deviations\n\n· n = no. of smoothing period days\n\n· σ\\[TP,n\\] = standard deviation over the past n TP periods\n\n5 of the best scalping indicators to use right away\n\nYou can experiment with various indicators, but there are some you can use right away to build your best scalping strategy.\n\n[Read more](https:\/\/blog.binomo1.com\/5-of-the-best-scalping-indicators-to-use-right-away\/)\n\n![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAASwAAACWAQAAAABMIIh\/AAAAAnRSTlMAAHaTzTgAAAAdSURBVFjD7cEBDQAAAMKg909tDjegAAAAAADgyQAW2gABp5XTtgAAAABJRU5ErkJggg==)\n\n![](https:\/\/blog.binomo1.com\/wp-content\/uploads\/2023\/04\/722-300x150.jpg)\n## **The buying channel**\n[![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAAUoAAAC4AQAAAACtf5gOAAAAAnRSTlMAAHaTzTgAAAAfSURBVFjD7cEBDQAAAMKg909tDjegAAAAAAAAAODHAB7oAAHLNhe9AAAAAElFTkSuQmCC) ![](https:\/\/blog.binomo1.com\/wp-content\/uploads\/2023\/04\/753-330x184.jpg) 4 reasons why price action trading may not work in 2023](https:\/\/blog.binomo1.com\/4-reasons-why-price-action-trading-may-not-work-in-2023\/)\n\nBollinger Bands are set over a price chart that includes a moving average along with the lower and upper bands. Between each band and moving average line, you will see an area that creates a range, commonly referred to as a channel. Bollinger Bands will show changes in relative volatility through the width of the band. If the band is wide, so is the volatility.\n\nThe buying channel is the one set above the moving average. The spot rates within this region will stay high when compared to the moving average. They suggest an upward momentum, meaning that it is the perfect time to buy. It is the opposite of the selling channel below the moving average, which suggests a downward momentum.\n\n## Bollinger Bands trading strategies\nAlthough you can develop your [own trading strategy](https:\/\/blog.binomo1.com\/best-60-second-strategies-for-binary-options-trading\/) based on the Bollinger Bands indicator, there are three major ways to use it.\n\n### 1\\. Bounce\nThe indicator’s bands are used as support and resistance levels. Thus, the upper band is a resistance boundary, while the lower band is a support boundary. You should remember that the price always tries to return to the middle line.\n\nThus, the idea is simple. When the price reaches the upper boundary, a trader can expect it to move down to the middle line. If the falling price reaches the lower boundary, a rebound towards the middle line can be expected. Such pullbacks can be used to enter the market.\n\n*The upper and lower bands are stronger on longer-term timeframes.*\n\nThis approach works best when there is no strong trend, and the price moves sideways. It’s dangerous to apply this scheme when the price moves within a strong trend. During periods of solid trend, the bands widen. This may lead to wrong signals and losing trades.\n\n### 2\\. Squeeze\nAs it was mentioned above, upper and lower boundaries serve as resistance and support levels. This means that the price is supposed to rebound from them. But it’s not always the case. In periods of a strong trend, the price may go beyond a band for a while.\n\nThis may work as an entry point for trend traders. If the price breaks above the upper boundary, you can open a long position. If the price goes below the lower band, you can open a short trade.\n\nUsually, the distance between the bands narrows before the strong trend. Thus, this may work as a signal for early market entry. If you see the bands narrow, you can expect a strong trend to form.\n\n### 3\\. Relative strength\n[![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAAUoAAAC4AQAAAACtf5gOAAAAAnRSTlMAAHaTzTgAAAAfSURBVFjD7cEBDQAAAMKg909tDjegAAAAAAAAAODHAB7oAAHLNhe9AAAAAElFTkSuQmCC) ![](https:\/\/blog.binomo1.com\/wp-content\/uploads\/2022\/05\/166-330x184.jpg) What are the best trading strategies for cryptocurrency?](https:\/\/blog.binomo1.com\/what-are-the-best-trading-strategies-for-cryptocurrency\/)\n\nThe Bollinger Bands indicator also helps traders determine an asset’s strength relative to its recent price range. The price can be considered relatively low or undervalued if it fluctuates near the lower band and relatively high or overvalued if it’s near the upper band.\n\n## Confirm bands signal\nYou should remember that there is no [trading strategy](https:\/\/blog.binomo1.com\/5-best-options-trading-strategies-for-beginners\/) that would be built on one indicator or pattern solely. Traders always look for signal confirmations from other tools. The best way is to find confirmation from 1-2 technical instruments. A large number of tools will confuse you by providing mixed alerts.\n\n- **Chart patterns.** As bouncing is one of the leading Bollinger Bands trading approaches, you should look for a confirmation of the market reversal. There are popular reversal patterns that can be combined with the Bollinger Bands tool. If the price is traded near the upper boundary, you should look for bearish patterns, including head and shoulders and double and triple top. If the price is near the lower band, you need bullish reversal patterns. They include inverse head and shoulders, double bottom, and triple bottom.\n- **Candlestick patterns.** It’s also possible to get a confirmation on the price reversal from candlestick patterns. They usually consist of one or two candles. The top bearish reversal candlestick patterns are shooting star, evening star, and bearish harami. The leading bullish reversal patterns are a hammer, bullish harami, and bullish engulfing.\n- **Indicators.** As Bollinger Bands can reflect oversold and overbought conditions, you can apply other indicators that provide similar signals. These are the Relative Strength Index (RSI) and Stochastic Oscillator. As for the price reversal alerts, you can also use RSI and Stochastic Oscillator or try such tools as MACD and Moving Averages.\n## Final thoughts\nBollinger Bands is a technical indicator that helps traders in key trading goals — determining market volatility and setting support and resistance levels. Moreover, it’s quite simple. There is only one parameter you should set before implementing the indicator on the price chart, and its signals are obvious. It’s also possible to build your own Bollinger Bands trading strategy based on this indicator by changing the period and applying it to different timeframes. Always remember that there is no perfect indicator, and every signal should be confirmed.\n\n*Disclaimer: No strategy can guarantee a 100% correct outcome of the trade.*\n\nEarn profit in 1 minute\n\n[Trade now](https:\/\/binomo.onelink.me\/509527443\/sdeojkdp)\n\n\\<span\\>Like\\<\/span\\>\n\nShare\n\n[Copy link Link copied](https:\/\/blog.binomo1.com\/what-is-the-bollinger-bands-trading-strategy\/#copy)\n\nGo\n\n![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAACQAAAAtAQAAAADudPT9AAAAAnRSTlMAAHaTzTgAAAANSURBVBjTY2AYBQgAAAEOAAE2MvKLAAAAAElFTkSuQmCC)\n\n![](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/triangle.svg)\n\n[Press Go and let the wheel choose your article of the day\\!]()\n\n![](data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==)\n\n![](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/remove-wheel.svg)\n\nRELATED ARTICLES\n\n[![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAAjAAAAEsAQAAAAD1drS\/AAAAAnRSTlMAAHaTzTgAAAAsSURBVHja7cExAQAAAMKg9U9tDQ+gAAAAAAAAAAAAAAAAAAAAAAAAAADgywBTNAABMi54hQAAAABJRU5ErkJggg==) ![](https:\/\/blog.binomo1.com\/wp-content\/uploads\/2022\/08\/472-560x300.jpg) ![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAABAAAAAQAQAAAAA3iMLMAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2AgDQAAADAAAceqhY4AAAAASUVORK5CYII=) ![](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/readtime.svg) 8 min ![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAABAAAAAQAQAAAAA3iMLMAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2AgDQAAADAAAceqhY4AAAAASUVORK5CYII=) ![](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/headphones-w.svg) Strategies Jul 6, 2022 3 effective exit strategies for day trading](https:\/\/blog.binomo1.com\/3-effective-exit-strategies-for-day-trading\/)\n\n[![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAAjAAAAEsAQAAAAD1drS\/AAAAAnRSTlMAAHaTzTgAAAAsSURBVHja7cExAQAAAMKg9U9tDQ+gAAAAAAAAAAAAAAAAAAAAAAAAAADgywBTNAABMi54hQAAAABJRU5ErkJggg==) ![](https:\/\/blog.binomo1.com\/wp-content\/uploads\/2022\/05\/Zaglushka_cat-560x300.jpg) ![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAABAAAAAQAQAAAAA3iMLMAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2AgDQAAADAAAceqhY4AAAAASUVORK5CYII=) ![](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/readtime.svg) 8 min ![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAABAAAAAQAQAAAAA3iMLMAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2AgDQAAADAAAceqhY4AAAAASUVORK5CYII=) ![](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/headphones-w.svg) Strategies Jul 6, 2022 Pivot points trading strategy](https:\/\/blog.binomo1.com\/pivot-points-trading-strategy\/)\n\n[![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAAjAAAAEsAQAAAAD1drS\/AAAAAnRSTlMAAHaTzTgAAAAsSURBVHja7cExAQAAAMKg9U9tDQ+gAAAAAAAAAAAAAAAAAAAAAAAAAADgywBTNAABMi54hQAAAABJRU5ErkJggg==) ![](https:\/\/blog.binomo1.com\/wp-content\/uploads\/2022\/05\/Zaglushka_cat-560x300.jpg) ![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAABAAAAAQAQAAAAA3iMLMAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2AgDQAAADAAAceqhY4AAAAASUVORK5CYII=) ![](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/readtime.svg) 8 min ![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAABAAAAAQAQAAAAA3iMLMAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2AgDQAAADAAAceqhY4AAAAASUVORK5CYII=) ![](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/headphones-w.svg) Strategies Jul 6, 2022 All about Higher High\/Lower Low strategy in trading](https:\/\/blog.binomo1.com\/all-about-higher-high-lower-low-strategy-in-trading\/)\n\n[![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAAjAAAAEsAQAAAAD1drS\/AAAAAnRSTlMAAHaTzTgAAAAsSURBVHja7cExAQAAAMKg9U9tDQ+gAAAAAAAAAAAAAAAAAAAAAAAAAADgywBTNAABMi54hQAAAABJRU5ErkJggg==) ![](https:\/\/blog.binomo1.com\/wp-content\/uploads\/2022\/05\/Zaglushka_cat-560x300.jpg) ![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAABAAAAAQAQAAAAA3iMLMAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2AgDQAAADAAAceqhY4AAAAASUVORK5CYII=) ![](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/readtime.svg) 8 min ![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAABAAAAAQAQAAAAA3iMLMAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2AgDQAAADAAAceqhY4AAAAASUVORK5CYII=) ![](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/headphones-w.svg) Strategies Jul 6, 2022 Volume trading strategy](https:\/\/blog.binomo1.com\/volume-trading-strategy\/)\n\n[![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAAjAAAAEsAQAAAAD1drS\/AAAAAnRSTlMAAHaTzTgAAAAsSURBVHja7cExAQAAAMKg9U9tDQ+gAAAAAAAAAAAAAAAAAAAAAAAAAADgywBTNAABMi54hQAAAABJRU5ErkJggg==) ![](https:\/\/blog.binomo1.com\/wp-content\/uploads\/2022\/06\/136-560x300.jpg) ![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAABAAAAAQAQAAAAA3iMLMAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2AgDQAAADAAAceqhY4AAAAASUVORK5CYII=) ![](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/readtime.svg) 8 min ![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAABAAAAAQAQAAAAA3iMLMAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2AgDQAAADAAAceqhY4AAAAASUVORK5CYII=) ![](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/headphones-w.svg) Strategies Jul 6, 2022 The best moving average strategies](https:\/\/blog.binomo1.com\/the-best-moving-average-strategies\/)\n\n[![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAAjAAAAEsAQAAAAD1drS\/AAAAAnRSTlMAAHaTzTgAAAAsSURBVHja7cExAQAAAMKg9U9tDQ+gAAAAAAAAAAAAAAAAAAAAAAAAAADgywBTNAABMi54hQAAAABJRU5ErkJggg==) ![](https:\/\/blog.binomo1.com\/wp-content\/uploads\/2022\/05\/Zaglushka_cat-560x300.jpg) ![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAABAAAAAQAQAAAAA3iMLMAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2AgDQAAADAAAceqhY4AAAAASUVORK5CYII=) ![](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/readtime.svg) 8 min ![](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAABAAAAAQAQAAAAA3iMLMAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2AgDQAAADAAAceqhY4AAAAASUVORK5CYII=) ![](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/headphones-w.svg) Uncategorized Jul 6, 2022 Best Nifty trading strategies](https:\/\/blog.binomo1.com\/best-nifty-trading-strategies\/)\n\n![gift](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAAMgAAACoAQAAAACN15xpAAAAAnRSTlMAAHaTzTgAAAAaSURBVFjD7cEBAQAAAIIg\/69uSEABAAAAfBkREAABcmKxnAAAAABJRU5ErkJggg==)\n\n![gift](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/subscribe-form-gift.png)\n\n![gift](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAABQAAAAUAQAAAACl8iCgAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2CgLgAAAFAAASIT6HUAAAAASUVORK5CYII=)\n\n![gift](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/subscribe-gift.svg)\n\nSubscribe to our blog\n\nAnd get an exclusive trading guideline\n\nSubscribe\n\n![subscribe sent](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAABgAAAAYAQAAAADIDABVAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2CgLQAAAGAAATeQF3gAAAAASUVORK5CYII=)\n\n![subscribe sent](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/subscribe-sent.svg)\n\nGreat! Please check your email\n\nWe've sent you an email to confirm your subscription\n\n![subscribe error](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAABgAAAAYAQAAAADIDABVAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2CgLQAAAGAAATeQF3gAAAAASUVORK5CYII=)\n\n![subscribe error](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/subscribe-error.svg)\n\nSomething went wrong\n\nTry reloading the page. If that doesn't help, please try again later\n\n[![Logo Binomo](data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAAJsAAAAkAQAAAAC2hnWBAAAAAnRSTlMAAHaTzTgAAAAPSURBVCjPY2AYBaNgZAEAAvQAAVIv2dYAAAAASUVORK5CYII=)![Logo Binomo](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/footerLogo.svg)](https:\/\/blog.binomo1.com\/)\n\n[Blog](https:\/\/blog.binomo1.com\/)\n\n[VIP](https:\/\/blog.binomo1.com\/vip\/)\n\n[About us](https:\/\/blog.binomo1.com\/about-binomo\/)\n\n[Promo](https:\/\/blog.binomo1.com\/promo\/)\n\n[FAQ](https:\/\/blog.binomo1.com\/faq\/)\n\n[Binomo1.com](https:\/\/binomo.onelink.me\/509527443\/sdeojkdp)\n\n[Start trading](https:\/\/binomo.onelink.me\/509527443\/sdeojkdp)\n\n[Privacy policy](https:\/\/blog.binomo1.com\/privacy-policy\/)\n\n[Editorial Policy](https:\/\/blog.binomo1.com\/editorial-policy\/)\n\n[Community](https:\/\/blog.binomo1.com\/community\/)\n\n[Glossary](https:\/\/blog.binomo1.com\/glossary\/)\n\nCONTACTS\n\n[Download on](https:\/\/binomo.onelink.me\/509527443\/m3hcxqme)\n\n[Download on](https:\/\/binomo.onelink.me\/509527443\/t987kc2n)\n\nThe content provided by Binomo Blog does not include financial advice, guidance or recommendations to take, or not to take, any trades, investments or decisions in relation to any matter. The content provided is impersonal and not adapted to any specific client, trader, or business. Results are not guaranteed and may vary from person to person. There are inherent risks involved with trading, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is solely at your own risk, you assume full responsibility.\n\n© 2022-2024 Binomo™ Blog is the official blog of the Binomo™ trading platform. All rights reserved\n\nOpen this page in another app?\n\nCancel\n\nOpen\n\n[Now it's trading time! is trading on Binomo – don't miss our stream](https:\/\/blog.binomo1.com\/what-is-the-bollinger-bands-trading-strategy\/)\n\n![]()","attrs_readable_markdown":"While it’s generally accepted that losses pull irrational traders out of asset markets, a study from INSEAD showed that overconfident traders don’t leave the market despite [losses](https:\/\/blog.binomo1.com\/what-to-do-when-the-stock-market-falls\/). However, those who want to avoid failures, may consider a Bollinger Bands trading strategy.\n\nBollinger Bands is a popular trading indicator used by traders and investors to define periods when the market is quiet or highly volatile. It’s one of the easiest and most effective trading tools. Keep reading to learn how to apply the indicator to your trades.\n\nTrading with up to 90% profit\n\n[Try now](https:\/\/binomo.onelink.me\/509527443\/sdeojkdp)\n## Bollinger Bands: the basics\nBollinger Bands is a technical tool that was developed by John Bollinger. The indicator consists of three lines: a middle line presented by a simple moving average and upper and lower bands, which are standard deviations above and below the middle line.\n\nThe Bollinger Bands indicator is applied to define a price’s volatility. When the bands are close to each other, the market is calm. If the price fluctuations increase, the distance between the bands widens. It can also help traders determine whether the market is overbought or oversold.\n\nWhen applying the indicator on the price chart, you need to determine only one parameter — period. The standard setting is 20. It’s usually used for higher timeframes, starting from 1-day. However, it doesn’t mean you shouldn’t use Bollinger Bands for short-term trades. You just need to reduce the period. Lower periods are more sensitive to price changes. It leads to a larger number of signals.\n\nEffective strategies in your mailbox\n\nSubscribe and discover a fund of trading knowledge\n\nSubscribe\n\n![](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/subscribe-sent.svg)\n\nGreat! Please check your email\n\nWe’ve sent you an email to confirm your subscription\n\n![](https:\/\/blog.binomo1.com\/wp-content\/themes\/blog\/assets\/images\/subscribe-error.svg)\n\nSomething went wrong\n\nTry reloading the page. If that doesn’t help, please try again later\n## **Bollinger Bands: definition and meaning for traders**\nBollinger Bands are technical analysis forms that traders use for plotting trend lines. These lines are often at a two-standard deviation distance from the security price of an SMA (simple moving average). Since traders generally look for incremental price movements, determining the volatility can help them calculate the potential net profit.\n\nThe goal of Bollinger Bands is to inform traders when they should exit or enter a position. It does that by finding out when an asset is being overbought or oversold. Once the signal is received, traders may buy or sell an asset to obtain a profit.\n\nCreated by John Bollinger, Bollinger Bands signal potential changes in volatility. When you have security ranges (e.g., currency pairs), the Bollinger Bands can offer you clear signals as to when you should buy or sell an asset.\n\nBear in mind that sometimes this may lead to frustrating losses, as stop-out may occur ahead of time. This is why traders should consider using different factors as well when using Bollinger Bands. Use indicators to determine the exit and entry points, taking action accordingly.\n\n## **How to calculate Bollinger Bands**\nBollinger Bands are made out of three bands: lower, upper, and moving average. The easiest way to calculate the Bollinger Band is through a 20-day SMA (simple moving average) index applied to the middle band.\n\nYou calculate the upper band by taking the middle band, after which you add twice that amount’s daily standard deviation. To calculate the lower band, you take the middle band and subtract twice the daily standard deviation.\n\nOnce you have that in mind, use the following formulas to obtain your numbers:\n\n*TP = (High + Low + Close) \/ 3*\n\n*BOLU = MA(TP,n)+m**∗**σ\\[TP,n\\]*\n\n*BOLD = MA(TP,n)−m**∗**σ\\[TP,n\\]*\n\nWhere:\n\n· TP = Typical Price\n\n· BOLD: Lower Bollinger Band\n\n· BOLU = Upper Bollinger Band\n\n· MA = Moving Average\n\n· m = no. of standard deviations\n\n· n = no. of smoothing period days\n\n· σ\\[TP,n\\] = standard deviation over the past n TP periods\n\n5 of the best scalping indicators to use right away\n\nYou can experiment with various indicators, but there are some you can use right away to build your best scalping strategy.\n\n[Read more](https:\/\/blog.binomo1.com\/5-of-the-best-scalping-indicators-to-use-right-away\/)\n\n![](https:\/\/blog.binomo1.com\/wp-content\/uploads\/2023\/04\/722-300x150.jpg)\n## **The buying channel**\nBollinger Bands are set over a price chart that includes a moving average along with the lower and upper bands. Between each band and moving average line, you will see an area that creates a range, commonly referred to as a channel. Bollinger Bands will show changes in relative volatility through the width of the band. If the band is wide, so is the volatility.\n\nThe buying channel is the one set above the moving average. The spot rates within this region will stay high when compared to the moving average. They suggest an upward momentum, meaning that it is the perfect time to buy. It is the opposite of the selling channel below the moving average, which suggests a downward momentum.\n\n## Bollinger Bands trading strategies\nAlthough you can develop your [own trading strategy](https:\/\/blog.binomo1.com\/best-60-second-strategies-for-binary-options-trading\/) based on the Bollinger Bands indicator, there are three major ways to use it.\n\n### 1\\. Bounce\nThe indicator’s bands are used as support and resistance levels. Thus, the upper band is a resistance boundary, while the lower band is a support boundary. You should remember that the price always tries to return to the middle line.\n\nThus, the idea is simple. When the price reaches the upper boundary, a trader can expect it to move down to the middle line. If the falling price reaches the lower boundary, a rebound towards the middle line can be expected. Such pullbacks can be used to enter the market.\n\n*The upper and lower bands are stronger on longer-term timeframes.*\n\nThis approach works best when there is no strong trend, and the price moves sideways. It’s dangerous to apply this scheme when the price moves within a strong trend. During periods of solid trend, the bands widen. This may lead to wrong signals and losing trades.\n\n### 2\\. Squeeze\nAs it was mentioned above, upper and lower boundaries serve as resistance and support levels. This means that the price is supposed to rebound from them. But it’s not always the case. In periods of a strong trend, the price may go beyond a band for a while.\n\nThis may work as an entry point for trend traders. If the price breaks above the upper boundary, you can open a long position. If the price goes below the lower band, you can open a short trade.\n\nUsually, the distance between the bands narrows before the strong trend. Thus, this may work as a signal for early market entry. If you see the bands narrow, you can expect a strong trend to form.\n\n### 3\\. Relative strength\nThe Bollinger Bands indicator also helps traders determine an asset’s strength relative to its recent price range. The price can be considered relatively low or undervalued if it fluctuates near the lower band and relatively high or overvalued if it’s near the upper band.\n\n## Confirm bands signal\nYou should remember that there is no [trading strategy](https:\/\/blog.binomo1.com\/5-best-options-trading-strategies-for-beginners\/) that would be built on one indicator or pattern solely. Traders always look for signal confirmations from other tools. The best way is to find confirmation from 1-2 technical instruments. A large number of tools will confuse you by providing mixed alerts.\n\n- **Chart patterns.** As bouncing is one of the leading Bollinger Bands trading approaches, you should look for a confirmation of the market reversal. There are popular reversal patterns that can be combined with the Bollinger Bands tool. If the price is traded near the upper boundary, you should look for bearish patterns, including head and shoulders and double and triple top. If the price is near the lower band, you need bullish reversal patterns. They include inverse head and shoulders, double bottom, and triple bottom.\n- **Candlestick patterns.** It’s also possible to get a confirmation on the price reversal from candlestick patterns. They usually consist of one or two candles. The top bearish reversal candlestick patterns are shooting star, evening star, and bearish harami. The leading bullish reversal patterns are a hammer, bullish harami, and bullish engulfing.\n- **Indicators.** As Bollinger Bands can reflect oversold and overbought conditions, you can apply other indicators that provide similar signals. These are the Relative Strength Index (RSI) and Stochastic Oscillator. As for the price reversal alerts, you can also use RSI and Stochastic Oscillator or try such tools as MACD and Moving Averages.\n## Final thoughts\nBollinger Bands is a technical indicator that helps traders in key trading goals — determining market volatility and setting support and resistance levels. Moreover, it’s quite simple. There is only one parameter you should set before implementing the indicator on the price chart, and its signals are obvious. It’s also possible to build your own Bollinger Bands trading strategy based on this indicator by changing the period and applying it to different timeframes. Always remember that there is no perfect indicator, and every signal should be confirmed.\n\n*Disclaimer: No strategy can guarantee a 100% correct outcome of the trade.*","meta_canonical":null}

3. Robots.txt Check

Query:

Response:

4. Spam/Ban Check

Query:

Response:

5. Seen Status Check

ℹ️ Skipped - page is already crawled

📄

INDEXABLE

✅

CRAWLED

2 days ago

🤖

ROBOTS ALLOWED

Page Info Filters

Filter	Status	Condition	Details
HTTP status	PASS	`download_http_code = 200`	HTTP 200
Age cutoff	PASS	`download_stamp > now() - 6 MONTH`	0.1 months ago
History drop	PASS	`isNull(history_drop_reason)`	No drop reason
Spam/ban	PASS	`fh_dont_index != 1 AND ml_spam_score = 0`	ml_spam_score=0
Canonical	PASS	`meta_canonical IS NULL OR = '' OR = src_unparsed`	Not set

Page Details

Property	Value
URL	https://blog.binomo1.com/what-is-the-bollinger-bands-trading-strategy/
Last Crawled	2026-04-19 08:41:41 (2 days ago)
First Indexed	2024-02-04 09:52:57 (2 years ago)
HTTP Status Code	200
Meta Title	Key Bollinger Band Trading Strategies
Meta Description	Bollinger Bands is one of the leading trading indicators that is used on all financial markets. Read this article to learn the most effective Bollinger Bands trading strategies.
Meta Canonical	null
Boilerpipe Text	While it’s generally accepted that losses pull irrational traders out of asset markets, a study from INSEAD showed that overconfident traders don’t leave the market despite losses . However, those who want to avoid failures, may consider a Bollinger Bands trading strategy. Bollinger Bands is a popular trading indicator used by traders and investors to define periods when the market is quiet or highly volatile. It’s one of the easiest and most effective trading tools. Keep reading to learn how to apply the indicator to your trades. Trading with up to 90% profit Try now Bollinger Bands: the basics Bollinger Bands is a technical tool that was developed by John Bollinger. The indicator consists of three lines: a middle line presented by a simple moving average and upper and lower bands, which are standard deviations above and below the middle line. The Bollinger Bands indicator is applied to define a price’s volatility. When the bands are close to each other, the market is calm. If the price fluctuations increase, the distance between the bands widens. It can also help traders determine whether the market is overbought or oversold. When applying the indicator on the price chart, you need to determine only one parameter — period. The standard setting is 20. It’s usually used for higher timeframes, starting from 1-day. However, it doesn’t mean you shouldn’t use Bollinger Bands for short-term trades. You just need to reduce the period. Lower periods are more sensitive to price changes. It leads to a larger number of signals. Effective strategies in your mailbox Subscribe and discover a fund of trading knowledge Subscribe Great! Please check your email We’ve sent you an email to confirm your subscription Something went wrong Try reloading the page. If that doesn’t help, please try again later Bollinger Bands: definition and meaning for traders Bollinger Bands are technical analysis forms that traders use for plotting trend lines. These lines are often at a two-standard deviation distance from the security price of an SMA (simple moving average). Since traders generally look for incremental price movements, determining the volatility can help them calculate the potential net profit. The goal of Bollinger Bands is to inform traders when they should exit or enter a position. It does that by finding out when an asset is being overbought or oversold. Once the signal is received, traders may buy or sell an asset to obtain a profit. Created by John Bollinger, Bollinger Bands signal potential changes in volatility. When you have security ranges (e.g., currency pairs), the Bollinger Bands can offer you clear signals as to when you should buy or sell an asset. Bear in mind that sometimes this may lead to frustrating losses, as stop-out may occur ahead of time. This is why traders should consider using different factors as well when using Bollinger Bands. Use indicators to determine the exit and entry points, taking action accordingly. How to calculate Bollinger Bands Bollinger Bands are made out of three bands: lower, upper, and moving average. The easiest way to calculate the Bollinger Band is through a 20-day SMA (simple moving average) index applied to the middle band. You calculate the upper band by taking the middle band, after which you add twice that amount’s daily standard deviation. To calculate the lower band, you take the middle band and subtract twice the daily standard deviation. Once you have that in mind, use the following formulas to obtain your numbers: TP = (High + Low + Close) / 3 BOLU = MA(TP,n)+m ∗ σ[TP,n] BOLD = MA(TP,n)−m ∗ σ[TP,n] Where: · TP = Typical Price · BOLD: Lower Bollinger Band · BOLU = Upper Bollinger Band · MA = Moving Average · m = no. of standard deviations · n = no. of smoothing period days · σ[TP,n] = standard deviation over the past n TP periods 5 of the best scalping indicators to use right away You can experiment with various indicators, but there are some you can use right away to build your best scalping strategy. Read more The buying channel Bollinger Bands are set over a price chart that includes a moving average along with the lower and upper bands. Between each band and moving average line, you will see an area that creates a range, commonly referred to as a channel. Bollinger Bands will show changes in relative volatility through the width of the band. If the band is wide, so is the volatility. The buying channel is the one set above the moving average. The spot rates within this region will stay high when compared to the moving average. They suggest an upward momentum, meaning that it is the perfect time to buy. It is the opposite of the selling channel below the moving average, which suggests a downward momentum. Bollinger Bands trading strategies Although you can develop your own trading strategy based on the Bollinger Bands indicator, there are three major ways to use it. 1. Bounce The indicator’s bands are used as support and resistance levels. Thus, the upper band is a resistance boundary, while the lower band is a support boundary. You should remember that the price always tries to return to the middle line. Thus, the idea is simple. When the price reaches the upper boundary, a trader can expect it to move down to the middle line. If the falling price reaches the lower boundary, a rebound towards the middle line can be expected. Such pullbacks can be used to enter the market. The upper and lower bands are stronger on longer-term timeframes. This approach works best when there is no strong trend, and the price moves sideways. It’s dangerous to apply this scheme when the price moves within a strong trend. During periods of solid trend, the bands widen. This may lead to wrong signals and losing trades. 2. Squeeze As it was mentioned above, upper and lower boundaries serve as resistance and support levels. This means that the price is supposed to rebound from them. But it’s not always the case. In periods of a strong trend, the price may go beyond a band for a while. This may work as an entry point for trend traders. If the price breaks above the upper boundary, you can open a long position. If the price goes below the lower band, you can open a short trade. Usually, the distance between the bands narrows before the strong trend. Thus, this may work as a signal for early market entry. If you see the bands narrow, you can expect a strong trend to form. 3. Relative strength The Bollinger Bands indicator also helps traders determine an asset’s strength relative to its recent price range. The price can be considered relatively low or undervalued if it fluctuates near the lower band and relatively high or overvalued if it’s near the upper band. Confirm bands signal You should remember that there is no trading strategy that would be built on one indicator or pattern solely. Traders always look for signal confirmations from other tools. The best way is to find confirmation from 1-2 technical instruments. A large number of tools will confuse you by providing mixed alerts. Chart patterns. As bouncing is one of the leading Bollinger Bands trading approaches, you should look for a confirmation of the market reversal. There are popular reversal patterns that can be combined with the Bollinger Bands tool. If the price is traded near the upper boundary, you should look for bearish patterns, including head and shoulders and double and triple top. If the price is near the lower band, you need bullish reversal patterns. They include inverse head and shoulders, double bottom, and triple bottom. Candlestick patterns. It’s also possible to get a confirmation on the price reversal from candlestick patterns. They usually consist of one or two candles. The top bearish reversal candlestick patterns are shooting star, evening star, and bearish harami. The leading bullish reversal patterns are a hammer, bullish harami, and bullish engulfing. Indicators. As Bollinger Bands can reflect oversold and overbought conditions, you can apply other indicators that provide similar signals. These are the Relative Strength Index (RSI) and Stochastic Oscillator. As for the price reversal alerts, you can also use RSI and Stochastic Oscillator or try such tools as MACD and Moving Averages. Final thoughts Bollinger Bands is a technical indicator that helps traders in key trading goals — determining market volatility and setting support and resistance levels. Moreover, it’s quite simple. There is only one parameter you should set before implementing the indicator on the price chart, and its signals are obvious. It’s also possible to build your own Bollinger Bands trading strategy based on this indicator by changing the period and applying it to different timeframes. Always remember that there is no perfect indicator, and every signal should be confirmed. Disclaimer: No strategy can guarantee a 100% correct outcome of the trade.
Markdown	[![Logo Binomo](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAJsAAAAkAQAAAAC2hnWBAAAAAnRSTlMAAHaTzTgAAAAPSURBVCjPY2AYBaNgZAEAAvQAAVIv2dYAAAAASUVORK5CYII=)![Logo Binomo](https://blog.binomo1.com/wp-content/themes/blog/assets/images/footerLogo.svg)](https://blog.binomo1.com/) - [Blog](https://blog.binomo1.com/) - [VIP](https://blog.binomo1.com/vip/) - [About us](https://blog.binomo1.com/about-binomo/) - [Promo](https://blog.binomo1.com/promo/) - [FAQ](https://blog.binomo1.com/faq/) [Start trading](https://binomo.onelink.me/509527443/sdeojkdp) - [![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAABgAAAAYAQAAAADIDABVAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2CgLQAAAGAAATeQF3gAAAAASUVORK5CYII=)![](https://blog.binomo1.com/wp-content/themes/blog/assets/images/flags/en.svg) English](https://blog.binomo1.com/what-is-the-bollinger-bands-trading-strategy/) - ![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAABgAAAAYAQAAAADIDABVAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2CgLQAAAGAAATeQF3gAAAAASUVORK5CYII=) ![](https://blog.binomo1.com/wp-content/themes/blog/assets/images/flags/en.svg) English ![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAAsAAAAIAQAAAAAHQzglAAAAAnRSTlMAAHaTzTgAAAALSURBVAjXY2DADgAAGAABTQdqSAAAAABJRU5ErkJggg==) ![](https://blog.binomo1.com/wp-content/themes/blog/assets/images/check_mark.svg) - [![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAABgAAAAYAQAAAADIDABVAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2CgLQAAAGAAATeQF3gAAAAASUVORK5CYII=)![](https://blog.binomo1.com/wp-content/themes/blog/assets/images/flags/pt-pt.svg) Português](https://blog.binomo1.com/pt-pt/what-is-the-bollinger-bands-trading-strategy/) - [![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAABgAAAAYAQAAAADIDABVAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2CgLQAAAGAAATeQF3gAAAAASUVORK5CYII=)![](https://blog.binomo1.com/wp-content/themes/blog/assets/images/flags/tr.svg) Türkçe](https://blog.binomo1.com/tr/) - [![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAABgAAAAYAQAAAADIDABVAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2CgLQAAAGAAATeQF3gAAAAASUVORK5CYII=)![](https://blog.binomo1.com/wp-content/themes/blog/assets/images/flags/id.svg) Indonesia](https://blog.binomo1.com/id/what-is-the-bollinger-bands-trading-strategy/) - [![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAABgAAAAYAQAAAADIDABVAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2CgLQAAAGAAATeQF3gAAAAASUVORK5CYII=)![](https://blog.binomo1.com/wp-content/themes/blog/assets/images/flags/hi.svg) हिन्दी](https://blog.binomo1.com/hi/what-is-the-bollinger-bands-trading-strategy/) \<span\>Like\</span\> Share [Copy link Link copied](https://blog.binomo1.com/what-is-the-bollinger-bands-trading-strategy/#copy) [Blog](https://blog.binomo1.com/) [Strategies](https://blog.binomo1.com/category/strategies/) What is the Bollinger Bands trading strategy? [Blog](https://blog.binomo1.com/) - [Top](https://blog.binomo1.com/what-is-the-bollinger-bands-trading-strategy/) - [Bottom](https://blog.binomo1.com/what-is-the-bollinger-bands-trading-strategy/) [VIP](https://blog.binomo1.com/vip/) [About us](https://blog.binomo1.com/about-binomo/) [Promo](https://blog.binomo1.com/promo/) [Main](https://blog.binomo1.com/) [Education](https://blog.binomo1.com/education/) [Binomo news](https://blog.binomo1.com/platform-news/) [How to trade](https://blog.binomo1.com/what-is-the-bollinger-bands-trading-strategy/) - [Strategies](https://blog.binomo1.com/category/strategies/) - [Tips](https://blog.binomo1.com/category/tips/) - [Money management](https://blog.binomo1.com/category/money-management/) - [Trading psychology](https://blog.binomo1.com/category/trading-psychology/) - [Technical analysis](https://blog.binomo1.com/category/technical-analysis/) - [Indicators](https://blog.binomo1.com/category/indicators/) [How to invest](https://blog.binomo1.com/category/how-to-invest/) [How to save](https://blog.binomo1.com/category/how-to-save/) [How to succeed](https://blog.binomo1.com/what-is-the-bollinger-bands-trading-strategy/) - [Success stories](https://blog.binomo1.com/category/success-stories/) - [Personalities](https://blog.binomo1.com/category/personalities/) - [Companies](https://blog.binomo1.com/category/companies/) [How to be trendy](https://blog.binomo1.com/what-is-the-bollinger-bands-trading-strategy/) - [Lifestyle](https://blog.binomo1.com/category/lifestyle/) - [Travel](https://blog.binomo1.com/category/travel/) - [Technology](https://blog.binomo1.com/category/technology/) - [Business](https://blog.binomo1.com/category/business/) - [Culture](https://blog.binomo1.com/category/culture/) [Quiz](https://blog.binomo1.com/quiz/) [Tests](https://blog.binomo1.com/tests/) ![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAABBoAAAISAQAAAABKJJGlAAAAAnRSTlMAAHaTzTgAAABbSURBVHja7cExAQAAAMKg9U9tB2+gAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAD4DBNpAAHFF/RbAAAAAElFTkSuQmCC) ![](https://blog.binomo1.com/wp-content/uploads/2022/04/163-1050x530.jpg) # What is the Bollinger Bands trading strategy? ![Lee Wei](data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==) ![Lee Wei](https://blog.binomo1.com/wp-content/uploads/2022/08/lee-wei.svg) [By Lee Wei](https://blog.binomo1.com/author/lee-wei/) Jul 6, 2022 ![Lee Wei](data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==) ![Lee Wei](https://blog.binomo1.com/wp-content/uploads/2022/08/lee-wei.svg) Lee Wei Financial Analyst and Trading Strategist As a financial planner, Lee helped people plan their retirement holistically and formulate sound investment policies. Certified Public Accountant and Chartered Financial Analyst. ![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAAwAAAAMAQAAAAB+DmFKAAAAAnRSTlMAAHaTzTgAAAALSURBVAjXY2AgDAAAJAABLh5xoAAAAABJRU5ErkJggg==) ![](https://blog.binomo1.com/wp-content/themes/blog/assets/images/level.svg) Level: Experienced ![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAAwAAAAOAQAAAAAzxsBBAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2AgFgAAACoAAbPCaxwAAAAASUVORK5CYII=) ![](https://blog.binomo1.com/wp-content/themes/blog/assets/images/time.svg) Reading time: 8 min Listen ![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAABAAAAAQAQAAAAA3iMLMAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2AgDQAAADAAAceqhY4AAAAASUVORK5CYII=) ![](https://blog.binomo1.com/wp-content/themes/blog/assets/images/headphones.svg) 4:13 While it’s generally accepted that losses pull irrational traders out of asset markets, a study from INSEAD showed that overconfident traders don’t leave the market despite [losses](https://blog.binomo1.com/what-to-do-when-the-stock-market-falls/). However, those who want to avoid failures, may consider a Bollinger Bands trading strategy. Bollinger Bands is a popular trading indicator used by traders and investors to define periods when the market is quiet or highly volatile. It’s one of the easiest and most effective trading tools. Keep reading to learn how to apply the indicator to your trades. Trading with up to 90% profit [Try now](https://binomo.onelink.me/509527443/sdeojkdp) ## Bollinger Bands: the basics Bollinger Bands is a technical tool that was developed by John Bollinger. The indicator consists of three lines: a middle line presented by a simple moving average and upper and lower bands, which are standard deviations above and below the middle line. The Bollinger Bands indicator is applied to define a price’s volatility. When the bands are close to each other, the market is calm. If the price fluctuations increase, the distance between the bands widens. It can also help traders determine whether the market is overbought or oversold. [![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAUoAAAC4AQAAAACtf5gOAAAAAnRSTlMAAHaTzTgAAAAfSURBVFjD7cEBDQAAAMKg909tDjegAAAAAAAAAODHAB7oAAHLNhe9AAAAAElFTkSuQmCC) ![](https://blog.binomo1.com/wp-content/uploads/2022/05/226-330x184.jpg) What is a stop loss and how to use it?](https://blog.binomo1.com/what-is-a-stop-loss-and-how-to-use-it/) When applying the indicator on the price chart, you need to determine only one parameter — period. The standard setting is 20. It’s usually used for higher timeframes, starting from 1-day. However, it doesn’t mean you shouldn’t use Bollinger Bands for short-term trades. You just need to reduce the period. Lower periods are more sensitive to price changes. It leads to a larger number of signals. Effective strategies in your mailbox Subscribe and discover a fund of trading knowledge Subscribe ![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAABgAAAAYAQAAAADIDABVAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2CgLQAAAGAAATeQF3gAAAAASUVORK5CYII=) ![](https://blog.binomo1.com/wp-content/themes/blog/assets/images/subscribe-sent.svg) Great! Please check your email We’ve sent you an email to confirm your subscription ![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAABgAAAAYAQAAAADIDABVAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2CgLQAAAGAAATeQF3gAAAAASUVORK5CYII=) ![](https://blog.binomo1.com/wp-content/themes/blog/assets/images/subscribe-error.svg) Something went wrong Try reloading the page. If that doesn’t help, please try again later ## Bollinger Bands: definition and meaning for traders Bollinger Bands are technical analysis forms that traders use for plotting trend lines. These lines are often at a two-standard deviation distance from the security price of an SMA (simple moving average). Since traders generally look for incremental price movements, determining the volatility can help them calculate the potential net profit. The goal of Bollinger Bands is to inform traders when they should exit or enter a position. It does that by finding out when an asset is being overbought or oversold. Once the signal is received, traders may buy or sell an asset to obtain a profit. Created by John Bollinger, Bollinger Bands signal potential changes in volatility. When you have security ranges (e.g., currency pairs), the Bollinger Bands can offer you clear signals as to when you should buy or sell an asset. Bear in mind that sometimes this may lead to frustrating losses, as stop-out may occur ahead of time. This is why traders should consider using different factors as well when using Bollinger Bands. Use indicators to determine the exit and entry points, taking action accordingly. ## How to calculate Bollinger Bands Bollinger Bands are made out of three bands: lower, upper, and moving average. The easiest way to calculate the Bollinger Band is through a 20-day SMA (simple moving average) index applied to the middle band. Start from \$10, earn to \$1000 [Trade now](https://binomo.onelink.me/509527443/sdeojkdp) You calculate the upper band by taking the middle band, after which you add twice that amount’s daily standard deviation. To calculate the lower band, you take the middle band and subtract twice the daily standard deviation. Once you have that in mind, use the following formulas to obtain your numbers: TP = (High + Low + Close) / 3 BOLU = MA(TP,n)+m∗σ\[TP,n\] BOLD = MA(TP,n)−m∗σ\[TP,n\] Where: · TP = Typical Price · BOLD: Lower Bollinger Band · BOLU = Upper Bollinger Band · MA = Moving Average · m = no. of standard deviations · n = no. of smoothing period days · σ\[TP,n\] = standard deviation over the past n TP periods 5 of the best scalping indicators to use right away You can experiment with various indicators, but there are some you can use right away to build your best scalping strategy. [Read more](https://blog.binomo1.com/5-of-the-best-scalping-indicators-to-use-right-away/) ![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAASwAAACWAQAAAABMIIh/AAAAAnRSTlMAAHaTzTgAAAAdSURBVFjD7cEBDQAAAMKg909tDjegAAAAAADgyQAW2gABp5XTtgAAAABJRU5ErkJggg==) ![](https://blog.binomo1.com/wp-content/uploads/2023/04/722-300x150.jpg) ## The buying channel [![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAUoAAAC4AQAAAACtf5gOAAAAAnRSTlMAAHaTzTgAAAAfSURBVFjD7cEBDQAAAMKg909tDjegAAAAAAAAAODHAB7oAAHLNhe9AAAAAElFTkSuQmCC) ![](https://blog.binomo1.com/wp-content/uploads/2023/04/753-330x184.jpg) 4 reasons why price action trading may not work in 2023](https://blog.binomo1.com/4-reasons-why-price-action-trading-may-not-work-in-2023/) Bollinger Bands are set over a price chart that includes a moving average along with the lower and upper bands. Between each band and moving average line, you will see an area that creates a range, commonly referred to as a channel. Bollinger Bands will show changes in relative volatility through the width of the band. If the band is wide, so is the volatility. The buying channel is the one set above the moving average. The spot rates within this region will stay high when compared to the moving average. They suggest an upward momentum, meaning that it is the perfect time to buy. It is the opposite of the selling channel below the moving average, which suggests a downward momentum. ## Bollinger Bands trading strategies Although you can develop your [own trading strategy](https://blog.binomo1.com/best-60-second-strategies-for-binary-options-trading/) based on the Bollinger Bands indicator, there are three major ways to use it. ### 1\. Bounce The indicator’s bands are used as support and resistance levels. Thus, the upper band is a resistance boundary, while the lower band is a support boundary. You should remember that the price always tries to return to the middle line. Thus, the idea is simple. When the price reaches the upper boundary, a trader can expect it to move down to the middle line. If the falling price reaches the lower boundary, a rebound towards the middle line can be expected. Such pullbacks can be used to enter the market. The upper and lower bands are stronger on longer-term timeframes. This approach works best when there is no strong trend, and the price moves sideways. It’s dangerous to apply this scheme when the price moves within a strong trend. During periods of solid trend, the bands widen. This may lead to wrong signals and losing trades. ### 2\. Squeeze As it was mentioned above, upper and lower boundaries serve as resistance and support levels. This means that the price is supposed to rebound from them. But it’s not always the case. In periods of a strong trend, the price may go beyond a band for a while. This may work as an entry point for trend traders. If the price breaks above the upper boundary, you can open a long position. If the price goes below the lower band, you can open a short trade. Usually, the distance between the bands narrows before the strong trend. Thus, this may work as a signal for early market entry. If you see the bands narrow, you can expect a strong trend to form. ### 3\. Relative strength [![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAUoAAAC4AQAAAACtf5gOAAAAAnRSTlMAAHaTzTgAAAAfSURBVFjD7cEBDQAAAMKg909tDjegAAAAAAAAAODHAB7oAAHLNhe9AAAAAElFTkSuQmCC) ![](https://blog.binomo1.com/wp-content/uploads/2022/05/166-330x184.jpg) What are the best trading strategies for cryptocurrency?](https://blog.binomo1.com/what-are-the-best-trading-strategies-for-cryptocurrency/) The Bollinger Bands indicator also helps traders determine an asset’s strength relative to its recent price range. The price can be considered relatively low or undervalued if it fluctuates near the lower band and relatively high or overvalued if it’s near the upper band. ## Confirm bands signal You should remember that there is no [trading strategy](https://blog.binomo1.com/5-best-options-trading-strategies-for-beginners/) that would be built on one indicator or pattern solely. Traders always look for signal confirmations from other tools. The best way is to find confirmation from 1-2 technical instruments. A large number of tools will confuse you by providing mixed alerts. - Chart patterns. As bouncing is one of the leading Bollinger Bands trading approaches, you should look for a confirmation of the market reversal. There are popular reversal patterns that can be combined with the Bollinger Bands tool. If the price is traded near the upper boundary, you should look for bearish patterns, including head and shoulders and double and triple top. If the price is near the lower band, you need bullish reversal patterns. They include inverse head and shoulders, double bottom, and triple bottom. - Candlestick patterns. It’s also possible to get a confirmation on the price reversal from candlestick patterns. They usually consist of one or two candles. The top bearish reversal candlestick patterns are shooting star, evening star, and bearish harami. The leading bullish reversal patterns are a hammer, bullish harami, and bullish engulfing. - Indicators. As Bollinger Bands can reflect oversold and overbought conditions, you can apply other indicators that provide similar signals. These are the Relative Strength Index (RSI) and Stochastic Oscillator. As for the price reversal alerts, you can also use RSI and Stochastic Oscillator or try such tools as MACD and Moving Averages. ## Final thoughts Bollinger Bands is a technical indicator that helps traders in key trading goals — determining market volatility and setting support and resistance levels. Moreover, it’s quite simple. There is only one parameter you should set before implementing the indicator on the price chart, and its signals are obvious. It’s also possible to build your own Bollinger Bands trading strategy based on this indicator by changing the period and applying it to different timeframes. Always remember that there is no perfect indicator, and every signal should be confirmed. Disclaimer: No strategy can guarantee a 100% correct outcome of the trade. Earn profit in 1 minute [Trade now](https://binomo.onelink.me/509527443/sdeojkdp) \<span\>Like\</span\> Share [Copy link Link copied](https://blog.binomo1.com/what-is-the-bollinger-bands-trading-strategy/#copy) Go ![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAACQAAAAtAQAAAADudPT9AAAAAnRSTlMAAHaTzTgAAAANSURBVBjTY2AYBQgAAAEOAAE2MvKLAAAAAElFTkSuQmCC) ![](https://blog.binomo1.com/wp-content/themes/blog/assets/images/triangle.svg) [Press Go and let the wheel choose your article of the day\!]() ![](data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==) ![](https://blog.binomo1.com/wp-content/themes/blog/assets/images/remove-wheel.svg) RELATED ARTICLES [![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAjAAAAEsAQAAAAD1drS/AAAAAnRSTlMAAHaTzTgAAAAsSURBVHja7cExAQAAAMKg9U9tDQ+gAAAAAAAAAAAAAAAAAAAAAAAAAADgywBTNAABMi54hQAAAABJRU5ErkJggg==) ![](https://blog.binomo1.com/wp-content/uploads/2022/08/472-560x300.jpg) ![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAABAAAAAQAQAAAAA3iMLMAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2AgDQAAADAAAceqhY4AAAAASUVORK5CYII=) ![](https://blog.binomo1.com/wp-content/themes/blog/assets/images/readtime.svg) 8 min ![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAABAAAAAQAQAAAAA3iMLMAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2AgDQAAADAAAceqhY4AAAAASUVORK5CYII=) ![](https://blog.binomo1.com/wp-content/themes/blog/assets/images/headphones-w.svg) Strategies Jul 6, 2022 3 effective exit strategies for day trading](https://blog.binomo1.com/3-effective-exit-strategies-for-day-trading/) [![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAjAAAAEsAQAAAAD1drS/AAAAAnRSTlMAAHaTzTgAAAAsSURBVHja7cExAQAAAMKg9U9tDQ+gAAAAAAAAAAAAAAAAAAAAAAAAAADgywBTNAABMi54hQAAAABJRU5ErkJggg==) ![](https://blog.binomo1.com/wp-content/uploads/2022/05/Zaglushka_cat-560x300.jpg) ![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAABAAAAAQAQAAAAA3iMLMAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2AgDQAAADAAAceqhY4AAAAASUVORK5CYII=) ![](https://blog.binomo1.com/wp-content/themes/blog/assets/images/readtime.svg) 8 min ![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAABAAAAAQAQAAAAA3iMLMAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2AgDQAAADAAAceqhY4AAAAASUVORK5CYII=) ![](https://blog.binomo1.com/wp-content/themes/blog/assets/images/headphones-w.svg) Strategies Jul 6, 2022 Pivot points trading strategy](https://blog.binomo1.com/pivot-points-trading-strategy/) [![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAjAAAAEsAQAAAAD1drS/AAAAAnRSTlMAAHaTzTgAAAAsSURBVHja7cExAQAAAMKg9U9tDQ+gAAAAAAAAAAAAAAAAAAAAAAAAAADgywBTNAABMi54hQAAAABJRU5ErkJggg==) ![](https://blog.binomo1.com/wp-content/uploads/2022/05/Zaglushka_cat-560x300.jpg) ![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAABAAAAAQAQAAAAA3iMLMAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2AgDQAAADAAAceqhY4AAAAASUVORK5CYII=) ![](https://blog.binomo1.com/wp-content/themes/blog/assets/images/readtime.svg) 8 min ![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAABAAAAAQAQAAAAA3iMLMAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2AgDQAAADAAAceqhY4AAAAASUVORK5CYII=) ![](https://blog.binomo1.com/wp-content/themes/blog/assets/images/headphones-w.svg) Strategies Jul 6, 2022 All about Higher High/Lower Low strategy in trading](https://blog.binomo1.com/all-about-higher-high-lower-low-strategy-in-trading/) [![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAjAAAAEsAQAAAAD1drS/AAAAAnRSTlMAAHaTzTgAAAAsSURBVHja7cExAQAAAMKg9U9tDQ+gAAAAAAAAAAAAAAAAAAAAAAAAAADgywBTNAABMi54hQAAAABJRU5ErkJggg==) ![](https://blog.binomo1.com/wp-content/uploads/2022/05/Zaglushka_cat-560x300.jpg) ![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAABAAAAAQAQAAAAA3iMLMAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2AgDQAAADAAAceqhY4AAAAASUVORK5CYII=) ![](https://blog.binomo1.com/wp-content/themes/blog/assets/images/readtime.svg) 8 min ![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAABAAAAAQAQAAAAA3iMLMAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2AgDQAAADAAAceqhY4AAAAASUVORK5CYII=) ![](https://blog.binomo1.com/wp-content/themes/blog/assets/images/headphones-w.svg) Strategies Jul 6, 2022 Volume trading strategy](https://blog.binomo1.com/volume-trading-strategy/) [![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAjAAAAEsAQAAAAD1drS/AAAAAnRSTlMAAHaTzTgAAAAsSURBVHja7cExAQAAAMKg9U9tDQ+gAAAAAAAAAAAAAAAAAAAAAAAAAADgywBTNAABMi54hQAAAABJRU5ErkJggg==) ![](https://blog.binomo1.com/wp-content/uploads/2022/06/136-560x300.jpg) ![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAABAAAAAQAQAAAAA3iMLMAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2AgDQAAADAAAceqhY4AAAAASUVORK5CYII=) ![](https://blog.binomo1.com/wp-content/themes/blog/assets/images/readtime.svg) 8 min ![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAABAAAAAQAQAAAAA3iMLMAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2AgDQAAADAAAceqhY4AAAAASUVORK5CYII=) ![](https://blog.binomo1.com/wp-content/themes/blog/assets/images/headphones-w.svg) Strategies Jul 6, 2022 The best moving average strategies](https://blog.binomo1.com/the-best-moving-average-strategies/) [![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAjAAAAEsAQAAAAD1drS/AAAAAnRSTlMAAHaTzTgAAAAsSURBVHja7cExAQAAAMKg9U9tDQ+gAAAAAAAAAAAAAAAAAAAAAAAAAADgywBTNAABMi54hQAAAABJRU5ErkJggg==) ![](https://blog.binomo1.com/wp-content/uploads/2022/05/Zaglushka_cat-560x300.jpg) ![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAABAAAAAQAQAAAAA3iMLMAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2AgDQAAADAAAceqhY4AAAAASUVORK5CYII=) ![](https://blog.binomo1.com/wp-content/themes/blog/assets/images/readtime.svg) 8 min ![](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAABAAAAAQAQAAAAA3iMLMAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2AgDQAAADAAAceqhY4AAAAASUVORK5CYII=) ![](https://blog.binomo1.com/wp-content/themes/blog/assets/images/headphones-w.svg) Uncategorized Jul 6, 2022 Best Nifty trading strategies](https://blog.binomo1.com/best-nifty-trading-strategies/) ![gift](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAMgAAACoAQAAAACN15xpAAAAAnRSTlMAAHaTzTgAAAAaSURBVFjD7cEBAQAAAIIg/69uSEABAAAAfBkREAABcmKxnAAAAABJRU5ErkJggg==) ![gift](https://blog.binomo1.com/wp-content/themes/blog/assets/images/subscribe-form-gift.png) ![gift](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAABQAAAAUAQAAAACl8iCgAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2CgLgAAAFAAASIT6HUAAAAASUVORK5CYII=) ![gift](https://blog.binomo1.com/wp-content/themes/blog/assets/images/subscribe-gift.svg) Subscribe to our blog And get an exclusive trading guideline Subscribe ![subscribe sent](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAABgAAAAYAQAAAADIDABVAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2CgLQAAAGAAATeQF3gAAAAASUVORK5CYII=) ![subscribe sent](https://blog.binomo1.com/wp-content/themes/blog/assets/images/subscribe-sent.svg) Great! Please check your email We've sent you an email to confirm your subscription ![subscribe error](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAABgAAAAYAQAAAADIDABVAAAAAnRSTlMAAHaTzTgAAAAMSURBVAjXY2CgLQAAAGAAATeQF3gAAAAASUVORK5CYII=) ![subscribe error](https://blog.binomo1.com/wp-content/themes/blog/assets/images/subscribe-error.svg) Something went wrong Try reloading the page. If that doesn't help, please try again later [![Logo Binomo](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAJsAAAAkAQAAAAC2hnWBAAAAAnRSTlMAAHaTzTgAAAAPSURBVCjPY2AYBaNgZAEAAvQAAVIv2dYAAAAASUVORK5CYII=)![Logo Binomo](https://blog.binomo1.com/wp-content/themes/blog/assets/images/footerLogo.svg)](https://blog.binomo1.com/) [Blog](https://blog.binomo1.com/) [VIP](https://blog.binomo1.com/vip/) [About us](https://blog.binomo1.com/about-binomo/) [Promo](https://blog.binomo1.com/promo/) [FAQ](https://blog.binomo1.com/faq/) [Binomo1.com](https://binomo.onelink.me/509527443/sdeojkdp) [Start trading](https://binomo.onelink.me/509527443/sdeojkdp) [Privacy policy](https://blog.binomo1.com/privacy-policy/) [Editorial Policy](https://blog.binomo1.com/editorial-policy/) [Community](https://blog.binomo1.com/community/) [Glossary](https://blog.binomo1.com/glossary/) CONTACTS [Download on](https://binomo.onelink.me/509527443/m3hcxqme) [Download on](https://binomo.onelink.me/509527443/t987kc2n) The content provided by Binomo Blog does not include financial advice, guidance or recommendations to take, or not to take, any trades, investments or decisions in relation to any matter. The content provided is impersonal and not adapted to any specific client, trader, or business. Results are not guaranteed and may vary from person to person. There are inherent risks involved with trading, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is solely at your own risk, you assume full responsibility. © 2022-2024 Binomo™ Blog is the official blog of the Binomo™ trading platform. All rights reserved Open this page in another app? Cancel Open [Now it's trading time! is trading on Binomo – don't miss our stream](https://blog.binomo1.com/what-is-the-bollinger-bands-trading-strategy/) ![]()
Readable Markdown	While it’s generally accepted that losses pull irrational traders out of asset markets, a study from INSEAD showed that overconfident traders don’t leave the market despite [losses](https://blog.binomo1.com/what-to-do-when-the-stock-market-falls/). However, those who want to avoid failures, may consider a Bollinger Bands trading strategy. Bollinger Bands is a popular trading indicator used by traders and investors to define periods when the market is quiet or highly volatile. It’s one of the easiest and most effective trading tools. Keep reading to learn how to apply the indicator to your trades. Trading with up to 90% profit [Try now](https://binomo.onelink.me/509527443/sdeojkdp) ## Bollinger Bands: the basics Bollinger Bands is a technical tool that was developed by John Bollinger. The indicator consists of three lines: a middle line presented by a simple moving average and upper and lower bands, which are standard deviations above and below the middle line. The Bollinger Bands indicator is applied to define a price’s volatility. When the bands are close to each other, the market is calm. If the price fluctuations increase, the distance between the bands widens. It can also help traders determine whether the market is overbought or oversold. When applying the indicator on the price chart, you need to determine only one parameter — period. The standard setting is 20. It’s usually used for higher timeframes, starting from 1-day. However, it doesn’t mean you shouldn’t use Bollinger Bands for short-term trades. You just need to reduce the period. Lower periods are more sensitive to price changes. It leads to a larger number of signals. Effective strategies in your mailbox Subscribe and discover a fund of trading knowledge Subscribe ![](https://blog.binomo1.com/wp-content/themes/blog/assets/images/subscribe-sent.svg) Great! Please check your email We’ve sent you an email to confirm your subscription ![](https://blog.binomo1.com/wp-content/themes/blog/assets/images/subscribe-error.svg) Something went wrong Try reloading the page. If that doesn’t help, please try again later ## Bollinger Bands: definition and meaning for traders Bollinger Bands are technical analysis forms that traders use for plotting trend lines. These lines are often at a two-standard deviation distance from the security price of an SMA (simple moving average). Since traders generally look for incremental price movements, determining the volatility can help them calculate the potential net profit. The goal of Bollinger Bands is to inform traders when they should exit or enter a position. It does that by finding out when an asset is being overbought or oversold. Once the signal is received, traders may buy or sell an asset to obtain a profit. Created by John Bollinger, Bollinger Bands signal potential changes in volatility. When you have security ranges (e.g., currency pairs), the Bollinger Bands can offer you clear signals as to when you should buy or sell an asset. Bear in mind that sometimes this may lead to frustrating losses, as stop-out may occur ahead of time. This is why traders should consider using different factors as well when using Bollinger Bands. Use indicators to determine the exit and entry points, taking action accordingly. ## How to calculate Bollinger Bands Bollinger Bands are made out of three bands: lower, upper, and moving average. The easiest way to calculate the Bollinger Band is through a 20-day SMA (simple moving average) index applied to the middle band. You calculate the upper band by taking the middle band, after which you add twice that amount’s daily standard deviation. To calculate the lower band, you take the middle band and subtract twice the daily standard deviation. Once you have that in mind, use the following formulas to obtain your numbers: TP = (High + Low + Close) / 3 BOLU = MA(TP,n)+m∗σ\[TP,n\] BOLD = MA(TP,n)−m∗σ\[TP,n\] Where: · TP = Typical Price · BOLD: Lower Bollinger Band · BOLU = Upper Bollinger Band · MA = Moving Average · m = no. of standard deviations · n = no. of smoothing period days · σ\[TP,n\] = standard deviation over the past n TP periods 5 of the best scalping indicators to use right away You can experiment with various indicators, but there are some you can use right away to build your best scalping strategy. [Read more](https://blog.binomo1.com/5-of-the-best-scalping-indicators-to-use-right-away/) ![](https://blog.binomo1.com/wp-content/uploads/2023/04/722-300x150.jpg) ## The buying channel Bollinger Bands are set over a price chart that includes a moving average along with the lower and upper bands. Between each band and moving average line, you will see an area that creates a range, commonly referred to as a channel. Bollinger Bands will show changes in relative volatility through the width of the band. If the band is wide, so is the volatility. The buying channel is the one set above the moving average. The spot rates within this region will stay high when compared to the moving average. They suggest an upward momentum, meaning that it is the perfect time to buy. It is the opposite of the selling channel below the moving average, which suggests a downward momentum. ## Bollinger Bands trading strategies Although you can develop your [own trading strategy](https://blog.binomo1.com/best-60-second-strategies-for-binary-options-trading/) based on the Bollinger Bands indicator, there are three major ways to use it. ### 1\. Bounce The indicator’s bands are used as support and resistance levels. Thus, the upper band is a resistance boundary, while the lower band is a support boundary. You should remember that the price always tries to return to the middle line. Thus, the idea is simple. When the price reaches the upper boundary, a trader can expect it to move down to the middle line. If the falling price reaches the lower boundary, a rebound towards the middle line can be expected. Such pullbacks can be used to enter the market. The upper and lower bands are stronger on longer-term timeframes. This approach works best when there is no strong trend, and the price moves sideways. It’s dangerous to apply this scheme when the price moves within a strong trend. During periods of solid trend, the bands widen. This may lead to wrong signals and losing trades. ### 2\. Squeeze As it was mentioned above, upper and lower boundaries serve as resistance and support levels. This means that the price is supposed to rebound from them. But it’s not always the case. In periods of a strong trend, the price may go beyond a band for a while. This may work as an entry point for trend traders. If the price breaks above the upper boundary, you can open a long position. If the price goes below the lower band, you can open a short trade. Usually, the distance between the bands narrows before the strong trend. Thus, this may work as a signal for early market entry. If you see the bands narrow, you can expect a strong trend to form. ### 3\. Relative strength The Bollinger Bands indicator also helps traders determine an asset’s strength relative to its recent price range. The price can be considered relatively low or undervalued if it fluctuates near the lower band and relatively high or overvalued if it’s near the upper band. ## Confirm bands signal You should remember that there is no [trading strategy](https://blog.binomo1.com/5-best-options-trading-strategies-for-beginners/) that would be built on one indicator or pattern solely. Traders always look for signal confirmations from other tools. The best way is to find confirmation from 1-2 technical instruments. A large number of tools will confuse you by providing mixed alerts. - Chart patterns. As bouncing is one of the leading Bollinger Bands trading approaches, you should look for a confirmation of the market reversal. There are popular reversal patterns that can be combined with the Bollinger Bands tool. If the price is traded near the upper boundary, you should look for bearish patterns, including head and shoulders and double and triple top. If the price is near the lower band, you need bullish reversal patterns. They include inverse head and shoulders, double bottom, and triple bottom. - Candlestick patterns. It’s also possible to get a confirmation on the price reversal from candlestick patterns. They usually consist of one or two candles. The top bearish reversal candlestick patterns are shooting star, evening star, and bearish harami. The leading bullish reversal patterns are a hammer, bullish harami, and bullish engulfing. - Indicators. As Bollinger Bands can reflect oversold and overbought conditions, you can apply other indicators that provide similar signals. These are the Relative Strength Index (RSI) and Stochastic Oscillator. As for the price reversal alerts, you can also use RSI and Stochastic Oscillator or try such tools as MACD and Moving Averages. ## Final thoughts Bollinger Bands is a technical indicator that helps traders in key trading goals — determining market volatility and setting support and resistance levels. Moreover, it’s quite simple. There is only one parameter you should set before implementing the indicator on the price chart, and its signals are obvious. It’s also possible to build your own Bollinger Bands trading strategy based on this indicator by changing the period and applying it to different timeframes. Always remember that there is no perfect indicator, and every signal should be confirmed. Disclaimer: No strategy can guarantee a 100% correct outcome of the trade.
Shard	143 (laksa)
Root Hash	13279327788873555343
Unparsed URL	com,binomo1!blog,/what-is-the-bollinger-bands-trading-strategy/ s443