What are Bollinger Bands?
Definition of Bollinger Bands: These bands can be described as technical analysis equipment. John Bollinger discovered these bands in 1980. It is a process that joins an average with the volatility of underlying instrument. These banks were invented to measure whether the costs are low or high on a comparative basis. They are designed two different standard deviations below and above a moving average. These bands look like a contradicting and expanding pipe. Costs will generally meet confrontation at the higher band and also offer support to the lower band. There are some tips designed especially for the Forex traders:
1. The contraction of the bands can be easily understood by seeing the expansion of the volatility in the future.
2. An extra signal is a sequence of the two best formations, in which one remains outside the band and the other followed by it. If it takes place on top, it indicates the selling of Forex. On the contrary, when it takes place under the band, it’s a signal indicating buying of the Forex.