📚 Do you know the Bollinger Bands rule? It’s one of the most powerful tools in technical analysis—and today I’ll show you how to use it like a pro 👇
📉 Bollinger Bands help traders spot overbought and oversold zones, as well as potential breakouts or periods of consolidation. The bands are made up of:
🔹 A Simple Moving Average (usually 20 periods)
🔹 An Upper Band = SMA + 2 standard deviations
🔹 A Lower Band = SMA - 2 standard deviations
💡 How to interpret them?
• If price hits or exceeds the upper band → the asset might be overbought 😬
• If it touches the lower band → it could be oversold 🧐
• Bands tightening? ➡️ Expect a volatility breakout soon 🚀
• Bands widening? ➡️ Indicates high volatility ⚡
🎯 Many traders combine Bollinger Bands with RSI or volume to confirm entry/exit signals. Using them properly can help you avoid FOMO trades and improve your timing dramatically.
🔥 Pro tip: When bands contract, stay alert… volatility is about to strike. Mastering this rule is a must for any serious crypto trader! 💪📊