Good old BB

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old article at VTrader site.

hmm, not bad to remember

Bollinger Bands Summary

Interpretation Description Results

1. Volatility

Bands widen Increase in volatility

Bands shrink Decrease in volatility

2. Consolidation – “Squeeze” When bands shrink tightly Breakout eminent

3. Exuberance of Current Trend – “Bulge” Bands widen too much A reversal is in the works

4. Continuation Price action closes above upper band/below lower band in subsequent sessions Continuation of upward/downward trend

Signals

1. Double Top

Peak closes above upper band then next peak closes below upper band Sell setup or signal

2. Double Bottom

Low closes below bottom band then next low closes above bottom band Buy setup or signal

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3. Price Targets (In ranging market)

Price bounced of lower band and approaching upper band

Band can be used as a profit target for long position

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Price bounced of upper band and approaching lower band.

Band can be used as a profit target for short position.

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Double Top Double Bottom