Bollinger Bands

Bollinger bands, developed by John Bollinger, Bollinger Capital Management in the 1980s, based on the size of the recent price action volatility. Bollinger used two standard deviation closing price and plotted the values above and below a simple moving average. The default parameters for the use of a simple Bollinger bar-20 moving average, and trading a planned line 2 standard deviation above and below the moving average. Using Bollinger bands can be improved by simple changes in CQG, which will be explained following this overview of the classical approach.

Trading bands tend to capture about 90% of the price data, less than about 95%, which will emerge if the market does not show a higher than normal level of variability in the average.
Bollinger band aims to provide a relatively high definition and low. By definition, the high price of above and below the lowest band. This definition can help in a tight pattern recognition and is useful in comparing price action action indicators to arrive at systematic trading decisions.

Bollinger band using a variety of traders. Some traders buy when price touches the lower Bollinger band and quit when the price reaches an average of moving the troops. Other traders buy when the price breaks above the upper Bollinger band or when the price falls below the lower Bollinger band. In addition, the use of Bollinger bands is not limited to forex traders; option implied volatility traders, especially traders often sell when Bollinger bands historically far or buy options when Bollinger bands historically close together, in either case, expect volatility to return to the average historical volatility to the market price.

Traders will vary the length of the moving average and standard deviation, based on how often they want to trade signals.

Technique
The tendency to contract and expand is the main value of the Bollinger bands. Market trends tend to come from a period of low volatility, which appears as a sideways movement in the price chart. When the market moved in a narrow range, the Bollinger bands will contract as the closing price are grouped around the average price.

Often, the market is marking time, waiting for some news that major economic statistics. When the news was announced, the market may move to a sustainable trend. The value of Bollinger bands is that you can identify the situation of low volatility, which can then be used as a condition in the Forex plus (for example, the difference between the upper and lower Bollinger band has fallen below a certain threshold), the conditions for marking graph or as a warning, a personalized learning components, or as a rule in systems for further analysis of marketing.

On the other hand there is a tendency to memperllebar during Bollinger trend. In fact, the beginning of a trend that will lead to two Bollinger to move in the opposite direction. This expansion confirms this trend. As a market trend, no slow momentum will result in the Bollinger bands are likely to change the direction of the trend. This is the first sign of losing momentum, and a reason to get out or take profits.

In addition, both the Bollinger bands will begin to contract, reminding yourself early trading range, and gives you a reason to get out of the whole trade. Both of these events can be the basis for the alert conditions or custom rules in trading systems.

A challenge with Bollinger bands are going to have to wait for the bar to close before they can determine the value end of the Bollinger bands. In other words, the value of the Bollinger band fluctuates with a lively bar.

If the market is surging upward, the Bollinger bands will increase and may be on the high bar at the moment. If the market turns around and closes the mid-range to high bar can now be tagging the top Bollinger band, but that is because in addition to under the sea creature. Labeling is not high on Bollinger when height actually happened.

Look back at the top of the graph, you can see that there are clearly points where Bollinger breakout trend marked or tagged the band marked the end of the trend. But you won't know if this is the case, while the bar is lively as Bollinger bands move with prices. You do not have a fixed frame of reference.

Bollinger bands advanced
Instead of using Bollinger bands as a direct calculation of the current bar, set the Bollinger bands as a frame of reference fixed by creating a private study that use the Formula Editor. Create a custom study for Bollinger bands and studies to low using the lookback period Bollinger band of your choice, but click and select offset-1. Advanced custom studies, Bollinger band who planned the previous value of the current live band Bollinger's bar, providing you with a fixed frame of reference.

Bollinger bands-advanced can be used as support and resistance levels. Bollinger bands are fixed price locks from the bar at the moment. Acne Bollinger bands indicate that continued market move past previous levels containing the price action. Breakout that reverses the resumed between Bollinger bands-advanced will signal a false breakout.