💥 Bollinger Bands — The secret weapon in market volatility!
Do you want to catch price explosions before they happen? The Bollinger indicator shows you where the pressure is building.
👉 Learn how to read volatility and trade like a sniper during explosions and breakouts 🎯📊
Welcome to episode 14 of:
"Understand indicators like a professional" 🔍
Today's topic: Bollinger Bands — Ride the explosion and avoid the trap!
📊 What is the Bollinger Band indicator?
The Bollinger Bands indicator consists of 3 dynamic lines on the chart:
Middle line: Simple moving average (usually 20 candles)
Upper line: Middle line + 2 standard deviations
Lower line: Middle line - 2 standard deviations
✅ Expands during high volatility
✅ Narrows during market calm — and this is where the magic begins 👀
🚨 Why are Bollinger Bands important?
Price often stays within the two lines
When the lines narrow → strong movement coming
When the price touches the upper/lower line → expect a rebound or reversal
📌 How do you use Bollinger Bands in trading?
1. The Squeeze strategy
When the lines narrow like a spring → prepare for a price explosion
Watch for rising volume + the candle breaking one of the lines
👉 Trade in the direction of the breakout with a tight stop loss
2. Return to the mean
When the price touches the upper line, it often returns to the middle line
And the same from the lower line
👉 Excellent for trading in sideways markets
3. Double confirmation
Use Bollinger Bands with RSI or MACD
If RSI is in overbought + price touches the upper line → strong reversal signal
⚠️ Common mistakes to avoid:
❌ Buying just because the price touched the lower line
❌ Ignoring trading volume — a breakout without volume = trap
❌ Trading in a volatile market randomly — wait for clear pressure or trend
📌 Next episode: MACD — The beast that reveals trend direction and momentum as if by magic ⚡📈
Follow me now to learn the secret behind this powerful indicator and its magical intersections!