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Bollinger Bands Secrets Page

Bollinger Bands Secrets Page

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Published by Sri Harsha Guturi

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Published by: Sri Harsha Guturi on Mar 20, 2011
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Bollinger Bands Secrets Page


Bollinger Bands - Secret
90% of all traders using Bollinger band never go beyond the first date to discover the true power and predictability that this indicator has to offer. New traders and veterans alike are totally unaware of some of the secrets I'm about to reveal to you right here in this short but revealing article. As you may know Bollinger bands consists of a pair of Bands around price action and a moving average, usually a 21 period moving average. The bands themselves typically represent 2 standard deviations around price. This simply allow a trader to see the mean, or moving average, and a distance from price in both directions that represents a 2 standard deviation from the mean. So you have the MIDDLE, and the OUTER limits if you will. Now, here's what most people know about Bollinger bands. They know that when price closes beyond a band on either side, it is likely to reverse if only for a short time. They also know that if the bands squeeze together tightly around price a likely break-out will occur in one direction or the other. This is what I mean by the first date. They learn this and move on to the next Holy Grail, never really getting into the meat, or the power that's at their fingertips. Bollinger Bands - The Meat... The above methods of using Bollinger bands are strong don't get me wrong, I made a killing in 2006, early 2007 and a big part of 2009 using a simple reversal strategy with Bollinger bands, but a closer look at price action relative to the bands gives you 10 times more insight. Reversals / Continuations Funny thing about Bollinger bands is that the reversal and the continuation set-ups are identical. In my opinion this is what frustrates most traders and this is why they never make it to the second date. They have a hard time with the fact that in the heat of the moment the mis ead hethe a contin ation 20-03-2011 10:33

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We'll use Bullish reversal's and continuations for this example and the opposite is true for bearish reversals or continuations. 2. Continuation . A transition from Bullish to Bearish conditions. Because both bands are flat this will likely be short lived. Approaching Price Action The key to your falling in love with Bollinger bands is careful observation of how the bands react to approaching price action. .Bollinger Bands Secrets Page http://www. Your best bet is to pull up 10 charts and spend some time observing how the bands react to approaching price action. 3. In a nut shell here is the magic formula.Likely a sharp reversal to the lower band. The fix is understand and observing how the bands react to approaching price action.) Price approaches the upper band and the upper band goes up and the lower band goes down. Reversal . You will experience "fake out's" sometimes but most of the time this set-up will produce some good profits when executed properly.. Continuation . This is a rare occurrence and is typical of a bigger market swing.Price will likely move up fast and furious.eezybooks. My guess is when your done you'll likely 20-03-2011 10:33 2 of 3 . Both bands not just the one being approached. 4.Reversal .. 1. This is the best continuation pattern for the bands.) Price approaches the upper band and the upper band goes up and the lower band is flat or moving up slightly. This is a rapid expansion of volatility. of the moment they misread whether a continuation or reversal set-up is forming and they more often than not get on the wrong side of the trade.Price will likely continue up slowly for a time.This is likely to result in a reversal but keep in mind price will likely only make it to the mean.) Price approaches the upper band and the upper and lower bands remain flat. the 21 period moving average with both bands heading down like this.) Price approaches the upper band and the upper and lower bands both go down.com/StoreFront/Bollinger-bandss.

com/StoreFront/Bollinger-bandss. y y y take Bollinger bands out on her long overdue second 3 of 3 20-03-2011 10:33 .. yg http://www.eezybooks..Bollinger Bands Secrets Page p date.

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