Here’s how to use Bollinger Bands for safe and effective swing trading:

STEP 1: AVOID CHOPPY & SIDEWAYS MARKETS

  • Bollinger Bands squeeze in sideways markets → No clear trend = Avoid trading.

  • Wait for bands to expand, signaling volatility and potential momentum.

STEP 2: ENTER WHEN PRICE MOVES ABOVE MIDDLE LINE (20 SMA)

  • Confirmation: Price crosses above the middle line (20-period SMA) → Potential uptrend.

  • Stronger Signal: Volume increases with the breakout.

STEP 3: PLACE STOP-LOSS BELOW THE LOWER BAND

  • Protection: Set stop-loss just below the lower band to limit risk.

  • Why? If price hits the lower band, the trend may reverse against you.

STEP 4: EXIT WHEN PRICE FALLS BELOW MIDDLE LINE

  • Take Profit: If price drops back below the middle line, consider closing the trade.

  • Lock in Gains: Don’t wait for a full reversal—secure profits early.

KEY RULES:

✔ Trade with the trend (Bands expanding + price above middle line).
✔ Never risk more than 1-2% per trade.
✔ Avoid low-volume breakouts (fake moves happen often).

Follow this, and you’ll trade smarter—not harder.


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