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Bollinger
Bands
Bollinger bands are one of the most popular technical
indicators. Many traders use them to determine overbought and
oversold levels and to measure the market’s volatility. The
line on top is usually act as a resistance
line and the bottom the support line.
We will buy when the price hit the lower Bollinger band and sell
when the price hits the upper Bollinger band.
It is recommended
to use a 20-day simple moving average ( SMA ) for the center band
and 2 standard deviations for the two outer bands. But traders may
change the length of the moving average and number of deviations
to better suit thier individual preferences.
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