Monday, June 8, 2009
Bollinger Bands
The Bollinger Bands indicator comprises of 3 lines. Those lines work by comparing the volatility and relative price levels over a specified past period of time. The 3 lines are the upper, middle and lower bands.
I am personally not a big fan of Bollinger Bands but then as they respond real quickly to price volatility, they can be good to use when trading breakouts. Let me explain. As the Bollinger Bands start to widen, we know that the price movement will start to go fast. As a result, there might possibly be a sharp spike upward or downward and it maybe a good time to trade.
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