Hello friends and mates today I am sharing an Idea about an indicator which is you can say very much loved and popular indicator used by all stream and time frame traders and that is BOLLINGER BANDS sharing below about this
𝐃𝐄𝐒𝐂𝐑𝐈𝐏𝐓𝐈𝐎𝐍-:
Bollinger Bands are a type of price envelope developed by John Bollinger (Price envelopes define upper and lower price range levels.) Bollinger Bands are envelopes plotted at a standard deviation level above and below a simple moving average of the price. Because the distance of the bands is based on standard deviation, they adjust to volatility swings in the underlying price.
Bollinger Bands use 2 parameters, Period and Standard Deviations, Standard deviation. The default values are 20 for period, and 2 for standard deviations, although you may customize the combinations by the given setting in trading view.
Bollinger bands help determine whether prices are high or low on a relative basis. They are used in pairs, both upper and lower bands and in conjunction with a moving average. Further, the pair of bands is not intended to be used on its own. Use the pair to confirm signals given with other indicators.
𝐇𝐎𝐖 𝐓𝐇𝐈𝐒 𝐈𝐍𝐃𝐈𝐂𝐀𝐓𝐎𝐑 𝐖𝐎𝐑𝐊𝐒-:
When the bands tighten during a period of low volatility, it raises the likelihood of a sharp price move in either direction. This may begin a trending move. Watch out for a false move in opposite direction which reverses before the proper trend begins.
When the bands separate by an unusual large amount, volatility increases and any existing trend may be ending.
Prices have a tendency to bounce within the bands' envelope, touching one band then moving to the other band. You can use these swings to help identify potential profit targets. For example, if a price bounces off the lower band and then crosses above the moving average, the upper band then becomes the profit target.
Price can exceed or hug a band envelope for prolonged periods during strong trends. On divergence with a momentum oscillator, you may want to do additional research to determine if taking additional profits is appropriate for you.
A strong trend continuation can be expected when the price moves out of the bands. However, if prices move immediately back inside the band, then the suggested strength is negated.
𝐊𝐄𝐘 𝐓𝐀𝐊𝐄𝐀𝐖𝐀𝐘𝐒-:
Bollinger Bands is a technical analysis tool to generate oversold or overbought signals and was developed by John Bollinger.
Three lines compose Bollinger Bands: A simple moving average, or the middle band, and an upper and lower band.
The upper and lower bands are typically 2 standard deviations +/- from a 20-day simple moving average and can be modified.
When the price continually touches the upper Bollinger Band, it can indicate an overbought signal.
If the price continually touches the lower band it can indicate an oversold signal.
The Squeeze
The "squeeze" is the central concept of Bollinger Bands®. When the bands come close together, constricting the moving average, it is called a squeeze. A squeeze signals a period of low volatility and is considered by traders to be a potential sign of future increased volatility and possible trading opportunities.
Conversely, the wider apart the bands move, the more likely the chance of a decrease in volatility and the greater the possibility of exiting a trade. These conditions are not trading signals. The bands do not indicate when the change may take place or in which direction the price could move.
𝐁𝐑𝐄𝐀𝐊𝐎𝐔𝐓𝐒-:
Approximately 90% of price action occurs between the two bands.
1
Any breakout above or below the bands is significant. The breakout is not a trading signal and many investors mistake that when the price hits or exceeds one of the bands as a signal to buy or sell. Breakouts provide no clue as to the direction and extent of future price movement.
𝐇𝐎𝐖 𝐀𝐂𝐂𝐔𝐑𝐀𝐓𝐄 𝐀𝐑𝐄 𝐁𝐎𝐋𝐋𝐈𝐍𝐆𝐄𝐑 𝐁𝐀𝐍𝐃𝐒-:
Since Bollinger Bands are set two use +/- two standard deviations around an SMA, we should expect that approximately 95% of the time, the observed price action will fall within these bands.
𝐄𝐗𝐀𝐌𝐏𝐋𝐄 𝐎𝐅 𝐏𝐎𝐒𝐈𝐓𝐈𝐕𝐄 𝐁𝐑𝐄𝐀𝐊𝐎𝐔𝐓-:
𝐄𝐗𝐀𝐌𝐏𝐋𝐄 𝐎𝐅 𝐍𝐄𝐆𝐀𝐓𝐈𝐕𝐄 𝐁𝐑𝐄𝐀𝐊𝐎𝐔𝐓-:
𝐍𝐎𝐓𝐄-: 𝐓𝐇𝐈𝐒 𝐈𝐃𝐄𝐀 𝐈𝐒 𝐎𝐍𝐋𝐘 𝐅𝐎𝐑 𝐄𝐃𝐔𝐂𝐀𝐓𝐈𝐎𝐍𝐀𝐋 𝐏𝐔𝐑𝐏𝐎𝐒𝐄.
𝐑𝐞𝐠𝐚𝐫𝐝𝐬-: 𝐀𝐦𝐢𝐭 𝐑𝐚𝐣𝐚𝐧
𝐃𝐄𝐒𝐂𝐑𝐈𝐏𝐓𝐈𝐎𝐍-:
Bollinger Bands are a type of price envelope developed by John Bollinger (Price envelopes define upper and lower price range levels.) Bollinger Bands are envelopes plotted at a standard deviation level above and below a simple moving average of the price. Because the distance of the bands is based on standard deviation, they adjust to volatility swings in the underlying price.
Bollinger Bands use 2 parameters, Period and Standard Deviations, Standard deviation. The default values are 20 for period, and 2 for standard deviations, although you may customize the combinations by the given setting in trading view.
Bollinger bands help determine whether prices are high or low on a relative basis. They are used in pairs, both upper and lower bands and in conjunction with a moving average. Further, the pair of bands is not intended to be used on its own. Use the pair to confirm signals given with other indicators.
𝐇𝐎𝐖 𝐓𝐇𝐈𝐒 𝐈𝐍𝐃𝐈𝐂𝐀𝐓𝐎𝐑 𝐖𝐎𝐑𝐊𝐒-:
When the bands tighten during a period of low volatility, it raises the likelihood of a sharp price move in either direction. This may begin a trending move. Watch out for a false move in opposite direction which reverses before the proper trend begins.
When the bands separate by an unusual large amount, volatility increases and any existing trend may be ending.
Prices have a tendency to bounce within the bands' envelope, touching one band then moving to the other band. You can use these swings to help identify potential profit targets. For example, if a price bounces off the lower band and then crosses above the moving average, the upper band then becomes the profit target.
Price can exceed or hug a band envelope for prolonged periods during strong trends. On divergence with a momentum oscillator, you may want to do additional research to determine if taking additional profits is appropriate for you.
A strong trend continuation can be expected when the price moves out of the bands. However, if prices move immediately back inside the band, then the suggested strength is negated.
𝐊𝐄𝐘 𝐓𝐀𝐊𝐄𝐀𝐖𝐀𝐘𝐒-:
Bollinger Bands is a technical analysis tool to generate oversold or overbought signals and was developed by John Bollinger.
Three lines compose Bollinger Bands: A simple moving average, or the middle band, and an upper and lower band.
The upper and lower bands are typically 2 standard deviations +/- from a 20-day simple moving average and can be modified.
When the price continually touches the upper Bollinger Band, it can indicate an overbought signal.
If the price continually touches the lower band it can indicate an oversold signal.
The Squeeze
The "squeeze" is the central concept of Bollinger Bands®. When the bands come close together, constricting the moving average, it is called a squeeze. A squeeze signals a period of low volatility and is considered by traders to be a potential sign of future increased volatility and possible trading opportunities.
Conversely, the wider apart the bands move, the more likely the chance of a decrease in volatility and the greater the possibility of exiting a trade. These conditions are not trading signals. The bands do not indicate when the change may take place or in which direction the price could move.
𝐁𝐑𝐄𝐀𝐊𝐎𝐔𝐓𝐒-:
Approximately 90% of price action occurs between the two bands.
1
Any breakout above or below the bands is significant. The breakout is not a trading signal and many investors mistake that when the price hits or exceeds one of the bands as a signal to buy or sell. Breakouts provide no clue as to the direction and extent of future price movement.
𝐇𝐎𝐖 𝐀𝐂𝐂𝐔𝐑𝐀𝐓𝐄 𝐀𝐑𝐄 𝐁𝐎𝐋𝐋𝐈𝐍𝐆𝐄𝐑 𝐁𝐀𝐍𝐃𝐒-:
Since Bollinger Bands are set two use +/- two standard deviations around an SMA, we should expect that approximately 95% of the time, the observed price action will fall within these bands.
𝐄𝐗𝐀𝐌𝐏𝐋𝐄 𝐎𝐅 𝐏𝐎𝐒𝐈𝐓𝐈𝐕𝐄 𝐁𝐑𝐄𝐀𝐊𝐎𝐔𝐓-:
𝐄𝐗𝐀𝐌𝐏𝐋𝐄 𝐎𝐅 𝐍𝐄𝐆𝐀𝐓𝐈𝐕𝐄 𝐁𝐑𝐄𝐀𝐊𝐎𝐔𝐓-:
𝐍𝐎𝐓𝐄-: 𝐓𝐇𝐈𝐒 𝐈𝐃𝐄𝐀 𝐈𝐒 𝐎𝐍𝐋𝐘 𝐅𝐎𝐑 𝐄𝐃𝐔𝐂𝐀𝐓𝐈𝐎𝐍𝐀𝐋 𝐏𝐔𝐑𝐏𝐎𝐒𝐄.
𝐑𝐞𝐠𝐚𝐫𝐝𝐬-: 𝐀𝐦𝐢𝐭 𝐑𝐚𝐣𝐚𝐧