Technical analysis indicators explanation series 📊
The second indicator: Bollinger Bands
introduction
Discover the power of the Bollinger Bands indicator in analyzing financial markets. This fundamental indicator measures volatility and effectively identifies trends.
How it works
1. It works on the basis of moving average (MA) with upper and lower bands.
2. The two belts reflect price fluctuations.
3. The distance between the two belts reflects the intensity of the fluctuations.
Main areas
1. Middle Area (MA): Represents the moving average.
2. Upper belt: resistance level.
3. Lower belt: support level.
Trading signals
1. Upper band break: buy signal.
2. Lower band break: sell signal.
3. High volatility: A sign of increased volatility.
4. Low volatility: A sign of low volatility.
Indicator settings
1. Duration (20): The number of time periods for the moving average.
2. Volatility rate (2): Number of standard deviations.
Advantages of use
1. Accurately determine directions.
2. Identify support and resistance levels.
3. Identify fluctuations.
4. Improve trading accuracy.
Disadvantages of use
1. Does not work well in flat markets.
2. It may show false signals.
3. Requires experience in technical analysis.
advice
1. Use with other indicators to improve accuracy.
2. Choose the appropriate settings for your strategy.
3. Follow market news and other analysis.
conclusion
Bollywood Indicator is a powerful tool in technical analysis. Use it effectively to improve your trading.
Learning Resources
1. Binance official website.
2. Binance YouTube channel.
3. Reddit trading forum.
4. Technical analysis books.
