Lesson 7 – Bollinger Bands

Inviato il 10 November 2008 da Forex Staff

Bollinger Bands where first developed by John Bollinger during the 1980s. Bollinger Bands enable traders to know if a currency price is high or low or overbought or oversold. The upper band is the limit that defines high prices, while the lower band defines lower prices. Bollinger bands will contract and expand depending of the elasticity of prices in relation with the pair’s price. Bollinger bands use the standard deviation measure, which is used to figure out the spread of prices around the "true price". A common practice for Forex traders is to use Bollinger Bands to define overbought and oversold levels, selling when price touches ...