Technical Analysis Using Bollinger Bands Volatility Indicator
The Indices Bollinger Bands Volatility Indicator are self adjusting which means the Bollinger bands widen and narrow depending on stock indices price volatility.
Standard Deviation is the statistical measure of stock indices price volatility that is used to calculate the widening of the indices Bollinger bands or narrowing of the indices Bollinger bands. Standard deviation will be higher when the indices prices are changing significantly and Standard deviation will be lower when the stock indices market prices are not changing a lot.
- When the stock indices price volatility is high the Bollinger Bands widen - Bollinger Bands Breakout Trading Strategy.
- When indices the stock indices price volatility is low the Bollinger Bands narrows - Bollinger Bands Consolidation Trading Strategy.
The Bollinger Band Squeeze
Narrowing of the indices Bollinger Bands is a sign of stock indices price consolidation and is known as the Bollinger Bands Squeeze.
When the Bollinger Bands indicator display narrow standard deviation it is usually a time of stock indices price consolidation, and this is also a indices signal that there will be a indices price breakout and it shows that indices traders are adjusting their indices trade positions for a new indices trend move. Also, the longer the indices prices stay within the narrow Bollinger Bands range the greater the chance of a indices price breakout.
Bollinger Bands Squeeze - Bollinger Bands Breakout Trading Strategy - Bollinger Bands Consolidation Trading Strategy
Indices Trading Bollinger Bands Volatility Breakout
The widening of Bollinger Bands indicator is a sign of a indices price breakout and this is known as the Bollinger Bands Bulge.
Bollinger Bands indicator that are far apart can be interpreted as a stock indices signal that a indices trend reversal is likely to happen. In the Bollinger Bands indicator stock indices trading example explained and illustrated below, the indices Bollinger Bands get very wide as a result of high stock indices price market volatility. The indices trend reverses as indices prices reach an extreme level according to statistics and the theory of normal distribution. The "Bollinger Bands Bulge" predicts the change of the trend to a downward indices trend.
Bollinger Bands Volatility Breakout - Bollinger Bands Breakout Trading Strategy
Bollinger Bands Volatility Indices Trading Breakout - Indices Technical Analysis Using Bollinger Bands Volatility Stock Indices Indicator - Bollinger Bands Breakout Indices Trading Strategy - Bollinger Bands Consolidation Trading Strategy
