|Welcome to currency trading with Profiforex!
|Subsequently, the window where we can change the indicators properties appears.Here we can choose the settings for the averaging period, method, shift, deviation and visualization.|
When we're choosing the method, we specify the prices to which the indicator will be applied.These are open prices, close prices, maximums, minimums and their different combinations.
|Bollinger bands constitute the channel whose width is proportional to the standard mean-square deviation of prices.|
In other words, it is level of a flat, or as it is also called - a measure of spread of random variables from a middle value.
We studied rather detailed about it in a video about regression lines. Bolindzher's bands with a deviation "2" are most often used.
In other words, it is considered that the price course is less than a binary normal deviate, and movement of the price is bigger than this deviation and will be a starting point of a trend. Bolindzher's bands increase during a trend
also they narrow when the prices become steadier.
In other words, during a flat it is necessary to open transactions on a rebound from Bolindzher's lines,
during a flat on breakthrough of these lines.
Usually, Bolindzher's bands are recommended to be used only as reference points of movement of the price for arrangement take-profits, they are seldomly used as a signal for an input in a line item. Anyway, before the use of bands of Bolindzher, we recommend to evaluate a market phase by means of other indicators.
Features of bands of Bollindzher: The sharp changes in price usually happen after the narrow banding corresponding to lowering of volatility.
The movement of the prices which started from one of boundaries of a band, usually reaches the opposite boundary.
In case of breakthrough of bands of Bolindzher and trend existence, it is possible to expect tendency continuation.
Bolindzher's bands also have one more useful application which isn't studied yet. After a trend, the price often hits opposite boundary of Bolindzher (after descending, about upper, after ascending about lower) and reaches the second boundary, continuing a trend.
It is necessary to mark that any trade on a rebound (in the flat assumption) it is possible only with use of stop warrants and in absence of important news. Take-profit is necessary.