To successfully engage in trend trading, one must first be able to determine the trend. The Bollinger Bands are a simple yet very intuitive analytical system.
As a technical indicator for tracking trends, Bollinger Bands are very effective and easy to apply.
As one of the commonly used tools in technical analysis, Bollinger Bands can help investors determine the price fluctuation range and future trends. Its bands can display safe high and low price levels, which is why it is also referred to as Bollinger Bands.
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The upper and lower ranges of the Bollinger Bands are not fixed; they change with price fluctuations. Prices fluctuate between the upper and lower limits of the Bollinger Bands, and the width of this banded area changes with the magnitude of price fluctuations. When the price fluctuation increases, the banded area widens; when the price fluctuation decreases, the banded area narrows. This is what we often say, 'Narrow range, no trend; wide range, there is a trend.'
