Discover our technical indicator strategies to optimize your trades
Bollinger Bands use volatility to create a dynamic channel around price. They consist of a central moving average and two bands based on standard deviation.
Used to identify overbought/oversold conditions and periods of high/low volatility.
Price touches or crosses lower band + Return to mean
Price touches or crosses upper band + Return to mean
Tight bands = low volatility, major move coming
Buy Signal : Price touches lower band + RSI < 30
Sell Signal : Price touches upper band + RSI > 70
Bet on return to mean. Ideal in trendless market (range).
Buy Signal : Upper band breakout + High volume
Sell Signal : Lower band breakout + High volume
Ride volatility explosions. Powerful in strong trend.
Squeeze : Very tight bands < 10% of price
Expansion : Wait for breakout and follow direction
The calm before the storm! Major volatility imminent.
%B = Price relative position in bands. %B > 1 = above upper band, %B < 0 = below lower band. %B = 0.5 = exactly in middle. Perfect to quantify strength!
Bandwidth = Distance between upper and lower bands. Low bandwidth (<10%) = Imminent squeeze. Increasing bandwidth = Volatility returning, powerful move ongoing!
Price touches upper/lower band twice = Strong reversal signal. Second touch is often best entry point! Confirm with RSI or volume.
If simultaneous squeeze on 1H AND 4H = GUARANTEED EXPLOSION! Wait for breakout and enter with conviction. Move will be massive. Set wide stops!
In strong uptrend, price can "walk" along upper band for weeks. Wait for reversal signal!
Squeeze is THE most powerful signal! When bands tighten < 10%, prepare. Explosion coming. Don't miss this setup!
ALWAYS combine with RSI, volume or support/resistance. Bollinger alone = 50% reliability. Bollinger + 2 confirmations = 80%+!
Price touches lower band + RSI < 30 = Powerful BUY. Price touches upper band + RSI > 70 = SELL. Simple, effective, tested millions of times.
Squeeze + Exploding volume = Guaranteed move. Wait for breakout with volume 2x above average. Direction = where volume goes!
Price touches lower band AND major support = Perfect buy zone. Price touches upper band AND resistance = Ideal sell zone. Surgical precision!
