Basic details of the Bollinger band indicator

Google+ Pinterest LinkedIn Tumblr +
Image by Lorenzo Cafaro from Pixabay

Once you start to understand the profit factors in trading, you get attracted to complex forms of market analysis. Things like the key swings and different kinds of trends need to be used to analyze the market data. At that level, the indicators of the trend lines and support and resistance levels will be used. After that, a semi advance tier section should be your concern. You have to learn about the moving average. This is nothing but the average of a certain number candlestick in the charts. You will get simple waves based on the calculations and the prices. It is good for understanding the volatility of the markets. However, there is a need to improve the analytical processes with the help of a demo account.

Many retail traders in Hong Kong have developed their skills by using demo accounts. So don’t feel frustrated in the learning stage. Consider the demo account as your learning ground and try to create a perfect trading plan. Once you manage to make a consistent profit using the basic tools, start using your real money to trade the market.

Using Bollinger bands for analysis

The thing we are going to talk about in this article is already clear in the sub-header. It is the Bollinger band and this is the thing which you need to understand properly. It is the same process of representing the volatility of the markets. The only difference is that you are going to take the opening and closing prices of a certain number of period back and calculate in the same way as moving average. From there, you will be able to see something like an oscillator range which will be causing the main signal to fluctuate. Based on that, you need to analyze the signals of a certain market.

Make sure you use the higher time frame to place the trades in the Forex trading account. Assume the overall trend is bullish. So, try to look for long trade setups in the Bollinger band support level and ignore the short signals. Try to trade with the major trend since it will make things easier. If possible focus on the fundamental details of this market and you will eventually get better at trading. Never forget the fact that the Bollinger band is nothing but an indicator. Be sure to use other essential tools to improve your win rate in trading. Focus on money management techniques to save your investment.

Order the trades with proper plans

Let’s learn the basics execution process using the Bollinger bands. Without even reading this segment, you can think about only one concept. From the upper band, you will get the potential of short order. For that, you have to rely on the resistance levels. On the other hand, the long orders will be coming from the support levels. That will be notified from the lower band. Using these two basic concepts you can always make a trade. But it will be for a short term of course. Because it is not right for the long term trading approaches. Oscillators like RSI and stochastic should be used with this tools to deal with short term data.

Consider the supports and resistance

Just like with the execution process, you need to think about the setups for closing. As we are talking about scalping or day trading, it is very important for you to depend heavily on the closing

Share.

About Author

Hi, Friend! My name is Gran Layson. I am an experienced currency and stock trader from Europe. If you want something to be done well, do it yourself, therefore often I feel myself as “Swiss Army Knife Man”. I am the Intomillion’s website administrator, developer ... read more

Comments are closed.

Forex Brokers
  • We believe in what we do

    Since the foundation of the project, we have been trying to turn one Dollar into a Million. Many dollars were lost on the way to the cherished goal. Nobody said it was going to be easy. However, we believe that everything is possible. Each time we lose a Dollar, we start again stronger with more experience and dedication. Today the project is much more than just about a Dollar. Our philosophy is openness and transparency. So apart from trading on Forex, we are creating a variety of useful Tools, sharing our developments, ideas, and experiences with our followers. We are true fans of financial markets and looking forward making trading more understandable and showing that profitable trading is possible.

All information on this page is subject to change. Forex, Futures, and Options trading has large potential rewards, but also large potential risks. The high degree of leverage can work against you as well as for you. You must be aware of the risks of investing in forex, futures, and options and be willing to accept them in order to trade in these markets. Forex trading involves substantial risk of loss and is not suitable for all investors. Please do not trade with borrowed money or money you cannot afford to lose. Any opinions, news, research, analysis, prices, or other information contained on this website is provided as general market commentary and does not constitute investment advice. Intomillion.com owners and affiliates will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. Please remember that the past performance of any trading system or methodology is not necessarily indicative of future results.