Главная / English / Bollinger Bands Indicator

Bollinger Bands Indicator

Bollinger bands indicator that sets the range of asset price movement is built on a basis of three moving averages: one in the middle and two other, located in the same distance from the first one. Range width is calculated by the mathematical formula of standard deviation. It’s coefficient may be set in the indicator settings. The higher is coefficient, the wider the range and the more and frequently the chart reaches borders.

Period is a quantitive candlesticks used in a calculation of indicated parameters. Increasing period smoothes the cardo but it’s not guarantying increasing indicated performance accuracy when the price approaches one of the lines. The probability of its movement shifts to the opposite direction. The breakdown of one of the lines signals probable trend moving towards the breakdown. The higher the volatility of the market the higher the corridor. Long term location of the indicator is in the narrow range, usually preceding up level in a market.

The Bollinger Bands indicator is best used in combination with other indicator. By the time the strong trend takes place this indicator alone becomes ineffective.

Понравилась статья? Поделитесь ей!