📉 Bollinger Bands – “Volatility + Price Range”
Type: Volatility-based
Default Settings:
Period: 20
Bands: ±2 standard deviations from a 20-period moving average
✅ How to Use:
Price near upper band: Market may be overbought (possible reversal or breakout)
Price near lower band: Market may be oversold (possible bounce or breakdown)
Bands contracting (squeezing): Low volatility → big move is coming
Bands expanding: High volatility → trend is strong
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🔍 Example Strategy:
Look for Bollinger Squeeze: When bands are tight for a while, a strong move (up or down) is likely.
Confirm direction with MACD, RSI, or Volume.
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💡 Pro Tip: Combine Bollinger Bands with candlestick patterns or support/resistance for best results.