Trading using Bollinger Band

In Continuation with Previous Article Introduction to Bollinger Bands
Bollinger Band Trading Strategies

• Bollinger Bands to identify tops and bottoms
• Trend Following

1. Bollinger Bands to identify tops and bottoms

Bollinger Band can be sued to identify potential tops and bottom in the stock/ETF. Following 3 points should be kept in mind to identify potential tops and bottom

• A trending price move beyond the upper band
• A pullback towards the middle of the Bollinger Bands
• Another move higher (past the previous price high) but not closing above the upper end of Bollinger Bands

A Bollinger Band top signals losing momentum in an uptrend. It is important to remember that closing prices are more important when using Bollinger Bands to understand the signal.


Continue Reading