As Bollinger Bands can tell you what exchange market will do next

As Bollinger Bands can tell you what exchange market will do next

In forex trading, as in all other speculative activities in the capital markets is not a major problem that all new and experienced traders, will face each time they open their forex trading stations. This is how to predict the behavior of the Forex market over time in order to make the highest amount of profit with less risk possible.

Among the techniques used in predicting the behavior of the Forex market, Bollinger bands are one of the most widely used and studied.

The first thing to notice Bollinger Bands is that they consist of a set of three curves drawn in a forex chart in terms of currency prices.

The central band is usually a simple moving average, and serves as a reference basis for large and small bands. These two groups are separated by two standard deviations from the central band, and the average is taken over 20 periods of time frame will be used when using the standard parameters of Bollinger bands.

Our main question here is how Bollinger bands will help in identifying and predicting what the markets are doing and will do next. There is a basic analysis that can be pursued in order to have an idea of ​​what comes forward with the behavior of markets based on Bollinger bands.

As mentioned above, Bollinger bands, three groups based on moving average and are closely related to the volatility of the market, making the channel between the upper and lower bands wider or narrower depending on how high or low volatility in the markets is .

Now for the forecast. Experienced Forex Traders know that when prices start touching the upper Bollinger Band in a repetitive pattern, which means that prices are very likely to go down, so they sell. And contrary situation, when prices continually touch the lower band is probably an indication that prices will go up and it's time to purchase a particular currency may trade.

Of course, there are more details on the analysis of Bollinger bands, but it is based on this observation about the prices touching one of the bands. And as with all forex indicators, they are not perfect, but it does not mean they can not be very good.



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