Strategies for Using Bollinger Bands Indicators

Bollinger Bands are technical indicators that function to determine the movement of the "normal" price range for all assets. When prices are beyond normal limits, this can be a sign to buy options.

Why do we need that?


  1. Determine the entry point.

How to use?


  1. Select "Bollinger Bands" from the list of indicators.



Bollinger Bands represent 3 lines on the price chart, which can narrow or widen depending on market volatility. When the market is quiet, Bollingerr Bands narrows, but when there are abnormal price spikes, the Bollinger Band will widen.

The yellow center line is a simple moving average with period 20. The other two lines are movement are indicators.

Bollinger Bands Strategy

"Bollinger Bands" is a trading strategy aimed at establishing trend reversals and price retreats to the average price level.

Simple pattern:
  1. Apply the Bollinger Bands indicator to the indicator.
  2. Wait for the candle to penetrate above / below the Bollinger Band above or below.

  • If the candle closes above the Bollinger band, this will indicate a signal that the price will soon decline and return to its average - buy a put option.
  • If the candle closes below the Bollinger band, this will indicate a signal that the price will immediately decline and return to the call option average.

Although very simple, Bollinger Bands are very useful indicators. With practical experience and the right analysis is very important when using technical indicators. This skill distinguishes between beginner and professional traders. It must also be noted that Bollinger Bands are not instruments that are used for all purposes and are not 100% correct.

You need to mix it with other indicators to get more accurate results.


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