How to trade with Bollinger Bands
Price moves outside the bands – trend continuation
When price moves and closes outside the Bollinger upper or lower bands, it implies a continuation of the trend. With it Bollinger bands continue to widen as volatility rises. But it is not always straight forward: at some point closing outside Bollinger bands will mean price exhaustion and upcoming trend reversal.
Bollinger bands alone are not able to identify continuation and reversal patterns and require support from other indicators, such as often RSI, ADX or MACD – in general all types indicators that highlight
markets from a different than volatility and trend prospective (momentum, volume, market strength, divergence etc).
Price moves outside the bands – trend continuation
When price moves and closes outside the Bollinger upper or lower bands, it implies a continuation of the trend. With it Bollinger bands continue to widen as volatility rises. But it is not always straight forward: at some point closing outside Bollinger bands will mean price exhaustion and upcoming trend reversal.
Bollinger bands alone are not able to identify continuation and reversal patterns and require support from other indicators, such as often RSI, ADX or MACD – in general all types indicators that highlight
markets from a different than volatility and trend prospective (momentum, volume, market strength, divergence etc).
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