ADVANTAGES AND DISADVANTAGES OF THE BOLLINGER BANDS INDICATOR
19 March 2024, 07:22
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Advantages
- Bollinger Bands are visually easy to interpret
- They can be used both as a volatility indicator and a momentum oscillator
- Bollinger Bands can be applied on any underlying asset across any time frame
- The indicator generates signals that not only provide precise entry levels, but also specify stop loss and take-profit zones
Disadvantages
- Bollinger Bands work better in sideways markets than in trending markets
- While it is possible to identify extreme price readings with Bollinger Bands, they are not ideal for this purpose
- Even though Bollinger Bands can trigger their own signals, it is important to use these signals in concurrence with other aspects of technical analysis
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