3. How to watch Bollinger Bands

 

Bollinger Bands is a stock technical analysis tool developed by John Bollinger in the 1090s and trademarked in 2011. Bollinger Bands, relative indicators and bandwidth, developed from the trading band concept, are used to determine the high or low relative price of previous trades.

 

 

 

 

 

 

◆ Before explaining Bollinger Bands

 

 

 

 

Bollinger Bands are the basic among various chart indicators. It is called a ball van for short, and it is used to predict the future stock price by schematically showing the past trend of the stock price as a band.

 

 

 

 

 

◆ Composition of Bollinger Bands

 

 

 

Bollinger Bands have 3 wires.

 

There is an upper band, a lower band and a center line, and the center line is replaced by a 20 moving average. The upper and lower bands are located at the same width above and below the 20 moving average, and 95% of the stock price is always located in the Bollinger Bands.

 

 

 

 

The stock price is predicted by the proposition that it is in the Bollinger Bands.

 

 

 

 

 

 

◆ Properties of Bollinger Bands

 

 

 

If you look at the chart above, the upper and lower blue bands are the upper and lower bands of the Bollinger Bands. Also, the orange line in the center becomes the 20 moving average, or center line.

 

 

 

The stock price has been in the ball-van from the beginning, but at the end of the last part, the stock price jumped out of the ball-van and shot upwards. In this case, if the stock price is interpreted based on the nature of entering the Bollinger band, it is not suitable as a buying timing if the stock price breaks out of the Bollinger band.

 

 

 

If you look at the center of the chart above, the Bollinger Band is moving right. In this case, it can be interpreted that the chart is also sloping upward, so it is worthy of consideration as a buying timing.

 

 

 

 

Click here for an explanation of how to trade and sell Bollinger Bands!