Binary Options Indicator Bollinger Bands - Has been developed and is described in detail by John Bollinger. Its essence lies in the fact that the price of the asset is in a sort of corridor, and the graph you can see buy signals option Call or put. The signals depend on the location of the asset price in relation to the boundaries of the corridor.
Bollinger BandsAs a tool Technical AnalysisIt can be used alone or in combination with other indicators. But I can say that Bollinger Bands excellent job with this task individually.
If you look at a live graph, you can see that Bollinger Bands indicator It consists of three moving averages. All of them have a different period of time.
In the middle is a simple moving average. Along the edges of lines form a corridor, where the value of an asset moves. Watching the display, you can learn about the trend of the asset, its spread and price volatility.
Bollinger Bands indicator signals:
- If you see the chart figure as a "neck" (the boundaries of the indicator most approach each other) - be aware that the volatility of the market is weak and there is no clear trend. At the same time you have to prepare for an early chёtkomu trend. It appears that Bollinger begin to disperse in different directions.
- To form a clear trend on the graph displayed at the sample strip. Depending on what the border was breached, the option is open. If broken the upper band - open the option to increase CALL. If the lower band is broken - open the option for a fall PUT.
- Traders should follow and rebound from Bollinger (trend reversal). The price of the asset will tend to move from one band to another. If the value of the asset touched the upper band, wait for the rebound (turn) and open an option for a fall PUT. If the value of the asset touched the lower band, wait for the rebound (turn) and open the option to increase CALL.
Bollinger Bands indicator - No doubt a great tool for analysis. Anyone recommend it!
This indicator of technical analysis has been successfully used for several decades, not only in Forex and binary options, but also in stock markets, as well as the famous Wall Street.
In general, I recommend reading the book "Bollinger on Bollinger Bands", which was written by the creator of the indicator. It is freely available on the Internet. Here, in addition to the detailed description and algorithm of the indicator, you will find absolutely all signals for opening trades.
Bollinger waves are so unique that they can generate a huge variety of signals for opening trades. For successful trading you can use only one of them. But I recommend to combine with MACD or Stochastic for filtering false signals.
It is based on three moving averages. In the middle, the MA has a 20 period, and the side SMA 20 + and SMA 20 have a standard deviation x 2.
In addition to signals for opening trades with this tool determine market volatility. If the channel narrows - it is minimal, the price remains in a narrow horizontal flat. This is not the best time to trade. And when the channel expands, a new trend is born due to an increase in market activity.
If most of the indicators are designed to work only by trend (or for flat), then Bollinger is universal. He showed himself well in work with lateral channelswhere the lower and upper lines act as support and resistance lines.