Learning Crypto-currency trading - Bollinger Bands

in #crypto7 years ago

What is a 'Bollinger Band'?

bollingerband.gif

Bollinger Bands®are a measure of volatility, when the markets become more volatile, the bands widen; during less volatile periods, the bands contract.

Breakouts:

Approximately 90% of price action occurs between the two bands. Any breakout above or below the bands is a major event. The breakout is not a trading signal (Bollinger recommends using multiple signals before committing to a trade). The mistake most people make is believing that that price hitting or exceeding one of the bands is a signal to buy or sell. Breakouts provide no clue as to the direction and extent of future price movement.

Source: https://www.investopedia.com/terms/b/bollingerbands.asp

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