Technical Analysis - Introduction to Bollinger Bands
Bollinger Bands were developed by John Bollinger as a specialized trading tool in early 1980s. They arose from the need for adaptive trading bands and the observation that volatility wasn’t static as was widely believed, but dynamic. Bollinger developed the technique of using moving averages with two trading bands. This isn’t unlike utilizing an envelope on either side of a moving average. However, unlike utilizing a percentage computation from the normal moving average, Bollinger Bands add and subtract a standard deviation calculation. bollinger bands are accustomed to give a definition of relative high and low. That is an indication of prices being “high” at one end and “low” at the other end. By using this definition can assist in recognizing rigorous patterns and pays to in the comparison of price action to indicator action when arriving at systematic trading decisions. Components Bollinger Bands consist of a centerline and two price channels. One price channel is above the cente