2006-10-02 07:46:16 · 4 answers · asked by rollingergrund 2 in Business & Finance ➔ Investing
In its default format, it places a line or "band" two standard deviations above and below and 20 day moving average. These bands contain 98% of price movement, so a print outside of the band is very unusual and powerful, therefore a signal of sorts.
When the bands contract and get very narrow, it is telling you that volatility has decreased, and if the range is very narrow, it usually is followed by a huge increase in volatility and explosion in price out of this range.
Unfortunately, the Forex markets go dead for several hours each evening, narrowing the bands and giving a false indication.
I tried to use the Bollinger Bands for years, and never could derive anything useful and gave it up.
Good luck.
2006-10-02 16:03:11 · answer #1 · answered by dredude52 6 · 0⤊ 1⤋
Bollinger bands show the volatility and direction of price over time.
They have no different meaning in FX trading than they do in equities or commodities.
2006-10-02 15:02:09 · answer #2 · answered by bookbyte 3 · 1⤊ 0⤋
bollinger bands are technical indicators based on trailing price movents of set time periods
2006-10-02 16:24:07 · answer #3 · answered by dhragtop 2 · 0⤊ 0⤋
Seriously, if you are trading on technichal indicators and do not know what a bollinger band is....STOP!!!!!!!!!!!!.............you need more education before you burn up your account
2006-10-02 14:49:56 · answer #4 · answered by jerry4_fun 2 · 0⤊ 1⤋