Bollinger on Bollinger Bands by John BollingerJohn Bollinger is a giant in todays trading community. His Bollinger Bands sharpen the sensitivity of fixed indicators, allowing them to more precisely reflect a markets volatility. By more accurately indicating the existing market environment, they are seen by many as todays standard--and most reliable--tool for plotting expected price action.
Now, in Bollinger on Bollinger Bands, Bollinger himself explains how to use this extraordinary technique to compare price and indicator action and make sound, sensible, and profitable trading decisions.
Concise, straightforward, and filled with instructive charts and graphs, this remarkable book will be essential reading for all serious traders, regardless of market. Bollinger includes his simple system for implementation, and techniques for combining bands and indicators.
A trading signal
Congratulations on making it to the 5th grade! Nor would you use a buzz saw to drive in nails. Just like in trading, some trading tools and indicators are best used in particular environments or situations. So, the more tools you have, the better you can adapt to the ever-changing market environment. For this lesson, as you learn about these indicators, think of each as a new tool that you can add to that toolbox of yours. You might even find one that you understand and comfortable enough to master on its own. Now, enough about tools already!
There are also some pitfalls of the indicators. In this article, we will address all these areas. Bollinger bands are composed of three lines. One of the more common calculations of Bollinger Bands uses a day simple moving average SMA for the middle band. The lower band is calculated by taking the middle band minus two times the daily standard deviation. When the price breaks above the upper band, a trader can short the asset betting on a move back to the middle band.
Build your trading muscle with no added pressure of the market. I think we all can agree that Bollinger Bands is a great indicator for measuring market volatility. But how do we apply this indicator to trading and what are the strategies that will produce winning results? Well, in this post I will provide you with six trading strategies you can test to see which works best for your trading style. Please take a moment to browse the table of contents to help navigate this lengthy post. I created this post to help people learn six highly effective Bollinger Bands trading strategies they could start using immediately. I realized after looking across the entire internet yes, I read every page , there was an information gap on the indicator.
Last Updated on August 13, Many new traders think they need more indicators to be a consistently profitable trader. Middle band — period Moving Average. If you want to learn more, go study this lesson on standard deviation. So, this is where Bollinger Bands can help because it contracts when volatility is low and expands when volatility is high. How do you use Bollinger Bands to anticipate a possible breakout?