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How to use Bollinger bands to make you profits

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January 30, 2018

The Bollinger band is one of the oldest and best indicators to apply in 2018

Any kind of proven good Forex indicators requires to include several forms of volatility channel. A Bollinger band uses the theory that if the purchase price moves beyond a moving average plus extra amount, a trend may have started. After 30 years in use, the Bollinger band is still one of the best indicators for Forex.

The Bollinger band indicator uses two guidelines, the first one is the number of days for the moving average and the second one is the number of standard deviations that you would like the band to deviate from the moving average. The most frequent values are 2 or 2.5 standard deviations.
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In statistics, the typical deviation is a way of measuring how to spread aside from the values of a data set in place are. In finance and in forex, the standard deviation functions as a means of gauging volatility.

What is actually the bottom line?

A Bollinger band indicator will adjust to forex market volatility. It widens as volatility rises and narrows as volatility reduces. A long-period trend-following system using Bollinger band indicator might use two standard deviations and a 350-day moving average. You can start an extended position if the prior day’s close is above the channel peak, and have a short if the prior day’s close is lower than the bottom of Bollinger band. The exit point would be when the prior day’s close crosses back again through the moving average.
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Categories: Advanced, Intermediate

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