Bollinger Bands

Discussion in 'Bollinger Bands' started by Profiforex, Nov 16, 2010.

  1. Profiforex

    Profiforex Administrator Staff Member

    ВВ is the channel with its width, proportional to the standard mean-square deviation of prices. In other words, it is the flat phase level.
    Standard deviation shows how much variation there is from the "average" (mean). Variation scale is equal to the square root of the variance.


    More often Bollinger lines with the index '2' are used. This means that the price movement less than binary normal deviation will be perceived as flat, while the price movement more than this deviation will be perceived as the starting point of the trend.
    ВВ narrows on trend when prices become more stable. In other words, you should open deals to rebound from BB on flat, while on trend you should open deals to breakout.
    Bollinger bands are recommended to use only as a guideline of price movement in order to place take-profits, but not as the point of entering the position. In any way, before using Bollinger Bands we recommend you to assess market phase with other indicators.

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