Bollinger Bands Indices Price Action in Ranging Indices Trading Markets

Bollinger Bands Indices Indicator is also used to identify periods when a stock indices market trend is overextended. The guidelines below are considered when applying this stock indices indicator to a sideways indices trend.

Bollinger Bands Indices Indicator is very important because it is used to give indices trading signals that a indices price breakout may be upcoming.

During a indices trending market these techniques do not hold, this only holds as long as Bollinger Bands are pointing sideways.

• If the stock indices trading market stock indices price touches the upper band it can be considered overextended on the upside - overbought.
• If the stock indices trading market stock indices price touches the lower band the stock indices price can be considered overextended on the bottom side - oversold.

One of the uses of Indices Bollinger Bands indicator is to use the above overbought and oversold indices trading guidelines to establish buy and sell targets during a ranging stock indices market.

• If stock indices price has bounced off the lower band crossed the center-line moving average then the upper band can be used a sell level.
• If stock indices price bounces down off the upper band crosses below the center moving average the lower band can be used as a buy level.

Bollinger Bands in Ranging Indices Trading Markets - Bollinger Bands Strategy

In the above ranging stock indices market the instances when the stock indices price hits the upper or lower bands can be used as profit targets for long/short indices trade positions.

Indices trades can be opened when the stock indices trading market hits the upper resistance level or lower support level. A stop loss order should be placed a few pips above or below depending on the indices trade opened, just in case the stock indices price action breaks out of the range within these Bollinger bands.