- Thread starter bhuwanpatel
- Start date

Developed by John Bollinger, Bollinger Bands allows users to compare volatility and relative price levels over a period time. The indicator consists of three bands designed to encompass the majority of a security's price action.

1. A simple moving average in the middle

2. An upper band (SMA plus 2 standard deviations)

3. A lower band (SMA minus 2 standard deviations)

Standard deviation is a statistical term that provides a good indication of volatility. Using the standard deviation ensures that the bands will react quickly to price movements and reflect periods of high and low volatility. Sharp price increases (or decreases), and hence volatility, will lead to a widening of the bands.

You can read the tutorial on Bollinger Bands at http://www.bollingerbands.com/services/bb/

Traderji said:

Developed by John Bollinger, Bollinger Bands allows users to compare volatility and relative price levels over a period time. The indicator consists of three bands designed to encompass the majority of a security's price action.

1. A simple moving average in the middle

2. An upper band (SMA plus 2 standard deviations)

3. A lower band (SMA minus 2 standard deviations)

Standard deviation is a statistical term that provides a good indication of volatility. Using the standard deviation ensures that the bands will react quickly to price movements and reflect periods of high and low volatility. Sharp price increases (or decreases), and hence volatility, will lead to a widening of the bands.

You can read the tutorial on Bollinger Bands at http://www.bollingerbands.com/services/bb/

This is a very good explanation. Although am a trend trader I have found the Bollinger Bands very useful in adjusting my stop-losses. I use the indicator to see if the trend has streched to far from the "mean" and then use it as an indicator which prepares me for when the market makes its move for "reversion to mean" from an over streched position of the existing trend.

Regards

Nautilus

I'll be glad to know your views on EMA.

Usually people say that don't confuse yourself by using lots of techniques. Use 2 or 3 techniques to judge the stock. What are the preffered TA techniques which you would recommend???

Also, How far should one rely on Technical Analysis? I mean does it really help all the time? Any good experiences? any bad experiences?

gandharvashu,

The site 'chartfilter.com' is not opening up.

You can read the following thread on A Moving Average Trading System

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