#Bollingerbands — this is a technical indicator that helps determine market volatility, overbought and oversold zones, as well as potential price reversal points. The indicator consists of three lines:
📈 Average line — moving average (usually SMA 20). Reflects the average price over a certain period.
📉 Upper and lower bands — calculated based on the standard deviation from the average line and show the range of volatility.
🤓 How to use Bollinger Bands:
▪️ The price touches the upper band — the market may be overbought (a downward correction is possible).
▪️ The price touches the lower band — the market may be oversold (an upward move is possible).
▪️ Band narrowing — low volatility, a strong move in one direction is possible.
▪️ Band expansion — high volatility, the trend is already developing.
🧐 Application strategies:
🔹 Squeeze — when the bands narrow down to a minimum — signals a possible impulse movement.
🔹 Bounce from borders — the price bounces off the upper/lower bands to the middle. Suitable for a flat market.
🔹 Breakout of the band — the price goes beyond the limits, especially on news — may signal a continuation of the movement, but requires confirmation.
🛍 Probability of execution:
▪️ Works great in a flat market and during increased volatility — probability of signal execution ~65–75%.
▪️ In trending movements, it may lag or give false reversals.
✔️ Recommendations:
🔸 Effectively combines with RSI, MACD, support/resistance levels, and candlestick patterns.
🔸 Do not open trades solely based on touching the bands — the market context is important.
📌 Remember: Bollinger Bands are not a signal by themselves, but a contextual tool showing what the price is doing in relation to volatility. 🔥 Insights INVESTIDEAUA: Intraday trading, LONG/SHORT strategies,
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