When the price breaks above the middle band of the Bollinger Bands (at the lower circle), the pullback is supported by the middle band, which can be used as a basis to enter a long position. When the price breaks below the middle band of the Bollinger Bands (at the upper circle), the rebound is suppressed by the middle band, which can be used as a basis to enter a short position. The default values for Bollinger Bands in general software are (26, 2). The value of the middle band of the Bollinger Bands is actually the value of the 26-day moving average.
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When setting moving averages, it is generally recommended to keep only the 5-day moving average, 10-day moving average, and 30-day moving average. The 30-day moving average does not fluctuate as frequently as the 5-day and 10-day moving averages, nor is it as lagging as the 60-day moving average or even the half-year line, so the 30-day moving average can be used as a sign of market reversal.
Thus, the middle band of the Bollinger Bands, which is close to the 30-day moving average, also has the function of the 30-day moving average.
When investors use the Bollinger Bands indicator, they can regard breaking below the middle band as a signal of market trend reversal.